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Advo Definitions & FAQs
Helping you understand our language
To help you understand what healthcare schemes are
about, we’ve included this helpful guide to medical
insurance. We have also created a Glossary of terms for
your reference.
What is medical insurance?
An insurance policy designed to cover the cost of acute
medical treatment required after the policy has started.
It will pay for treatment of acute episodes of illness or injury.
How many people benefit from medical insurance in the UK?
6.5 million people through an individual policy or via a company scheme.
How do I make a claim?
Each insurer has a different procedure for claiming, see our "How to claim guide" for more details.
What are the benefits of medical insurance?
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You get treatment when and where you want it |
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You get your choice of hospital and consultant. |
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It’s quick and convenient. |
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You always get a private room. |
What’s the difference between medical insurance, income replacement and cash plans?
Only Medical Insurance will pay for the treatment
you require. Cash plans only pay a small amount of
money if you are hospitalised. This may not be
enough to cover private treatment. Income
replacement will provide a monthly payment to
replace your income if you can’t work through
accident or illness. If you contract one of the
named critical illnesses, you receive a lump sum.
What’s the difference between Budget and Comprehensive cover?
The level of cover provided by the different schemes
will vary between insurers. Different schemes also use
different hospitals.
Is there a limit to my cover?
All policies have areas where cover is limited.
This is to control claims costs and limit premiums
from rising to unsustainable levels. The cost of
hospital treatment and out-patient consultations is
not generally limited. Limits for medical insurance
usually apply to such services as alternative
medicines, home nursing, private ambulances etc.
Can I save money by paying the Excess?
It’s possible to save as much as 20% on monthly
premiums by adding an excess of £100 or £200 to a
policy. Larger excesses (up to £5,000) and shared
cost schemes are increasingly popular as the
premiums are extremely competitive.
Is anything excluded from a policy?
All private medical cover excludes certain things to
control costs and keep premiums down. This is a list
of the most common exclusions you can expect:
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Pre-existing conditions (as covered in Underwriting) |
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Temporary relief or control of chronic conditions. This is a condition
deemed incurable e.g. Hayfever. Cancer and Heart disease are considered curable. An acute phase of a chronic illness, provided it is not a pre-existing condition, is covered and benefit is payable. |
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Normal pregnancy, infertility treatment, sterilisation (male or female), any form of assisted reproduction. |
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Termination of a pregnancy or any foetal surgery. |
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Treatment in Health Hydros. |
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Experimental treatment, unless authorised beforehand. |
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Cosmetic treatment except caused by an accident or medically necessary operation. |
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Treatment caused by war, riot, revolution or similar event. |
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Medical aids that are not part of your body e.g. glasses or crutches. |
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Treatment by a GP or treatment by a dentist. |
What is underwriting?
Private medical insurance will not cover any
conditions that exist or are known about.
Insurance may still be offered but will exclude
these existing conditions. Only unforeseen medical
conditions can be covered.
To administer this, the insurance companies
use one of the following:
A. Full Medical Underwriting
This is the most common form of risk management
used by private medical insurance providers.
Newly-insured individuals must provide information
about their medical history – the questions vary
from company to company. The answers reveal
current or expected treatment, and these are
then excluded from the cover. As a result, the
insurer will not have to pay claims immediately as
this will impact on the overall claims fund
(how much you can claim as a policy holder).
Past treatment from a GP or consultant will
generally be excluded – it depends on the condition
in question.
B. Moratorium
This type of underwriting excludes all previous
conditions for a continuous period of (usually)
2 years. If no symptoms occur, and no treatment
or advice is sought during the 2 years, the
condition is then covered. The moratorium is
rolling so the 2-year period could start again
from the date of symptoms, advice or treatment.
Note: the exact terms of a moratorium can
vary from insurer to insurer. A full
disclosure of the insurers’ moratorium
should be obtained.
How on earth do I choose which policy to take?
With the proliferation of policies available, it’s
become impossible to make an informed
decision without the help of an expert.
That expert should be a specialist healthcare
intermediary, regulated by the
General Insurance Standards Council and
preferably a member of the Association of
Medical Insurance Intermediaries (AMII).
The AMII is an association dedicated to
maintaining the high standards of service that
specialist medical insurance intermediaries
currently offer.
Can I use any hospital?
Each scheme has its own defined hospital list
which lists the hospitals that are available on
the particular scheme you have chosen. This might
also then be sub-divided into different scales –
sometimes using a, b or c or other methods.
So all hospitals are available to be used however
consideration needs to be given at the point of
purchase to ensure that any hospital you would
particularly like is available on the list for
the scheme you have chosen. If a scheme is chosen
that has a network of hospitals there would be
an allowance for treatment to be received at the
most appropriate hospital should the hospitals on
the network not have the medical capability to
treat any particular condition.
Will I need a medical?
Most of the schemes are joined without the need
for a medical. However, there are some schemes
where a medical may be necessary. This almost
always done at the expense of the insurer
and should be seen as a positive benefit.
Does the company contact my GP for medical records?
Medical insurance is not designed to pay for
conditions that are already present when you
take out a policy. To do this insurers use one
of the forms of underwriting described in our
fact sheet. Like all insurances there needs to
be checks built into the system and with medical
insurance the check will come from the GP records
of the insured person. In most cases there is no
need for the GP to be contacted nor for the medical
records to be disclosed when taking out a policy.
The contact with the GP is usually done with any
checks that may be required at the point of claim
for which a claim for is used.
Do any of the companies operate at the specialist fee schedule system?
Most of the insurance companies offer a table of
specialist fees that are payable in the event of
a claim. The only company that is currently able
to publish this is BUPA due to an office of fair
trading ruling which prevents other companies that
use these schedules to publish these. In fairness
most companies fee schedules are broadly the same
and as altering is pre-authorised you do have the
opportunity to know if there will be any shortfall
on your selected specialist, prior to any treatment
taking place. There are also schemes where there is
no fee schedule and full cover means full cover and
the insurer will pay an eligible claim irrespective
of the fees that the consultant may charge. If a
consultant is extremely expensive on a persistent
basis this may lead to an insurer removing them
from their approved panel which means you would
not be able to use them at all. This however is
extremely rare. Most consultants will charge what
is a reasonable and customary amount for the
procedure performed. Further advice would need
to be given on a scheme’s specific basis.
If they cannot treat me in my hospital of choice can I claim compensation?
The objective of medical insurance is to cover the
costs of treatment of acute medical condition
within the terms and conditions of the policy.
This enables you to have treatment at any of
the hospitals on the schemes hospital list
(see “can I use any hospital?”) and
the insurer will indemnify the costs.
Therefore the issue of compensation would
not arise as the only reason for not being
treated in the hospital of your choice and
on your scheme’s hospital list would be if
that hospital was unable to treat you either
in the time frame that you require or indeed
for the condition that you have.
If I have to make lots of claims will the premium increase drastically?
Almost all of the schemes are community rated
within the appropriate age banding. This
means that premiums are set using the claims
experience across the community (i.e. all
people of your age) of insured individuals.
This is the original principal of insurance
and even if you have extremely high claims your
premium would still be at the community rated
premium. There are some schemes that use a no
claims discount to reward those people that don’t
claim by reducing the community rated premium.
Just like car insurance any no claims discount
that you have will reduce should you make claims.
Therefore if you are on a scheme with a no
claims discount although the base rates are
worked out on a community basis because of
the no claims discount you can see your
premium rise as a direct result of claims that
you make.
The above information does not constitute part of
any contract nor should it be relied upon as
specific advice.
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