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Product matters

You would imagine that the current state of the NHS would have people rushing to buy private medical insurance in their droves but with medical inflation increasing by around 10-15 per cent a year, is it any wonder that the individual PMI market is reducing by an estimated 4 per cent a year?

There is a growing interest in “self-pay” and last year 30 per cent of all private admissions were on this basis.

To meet this trend, Western Provident Association has introduced a shared responsibility option called Flexible Health. This product allows customers to share the cost of treatment on a 25:75 basis up to a personal maximum of £1,000, £3,000 or £5,000 a year.

This is better than an excess as people do not need to find the full cost of claims as they always get back at least 75 per cent from WPA. This can cut premiums by 30-50 per cent with WPA.

Flexible Health has evolved out of the demands of the PMI marketplace, building from the experience with XS Health (high-excess PMI) and Self Pay Protect (reimburses hospital treatment by 30-75 per cent). These plans have dramatically reduced premiums and annual increases are less than 4 per cent a year.

There are also special terms for the self-employed, with generally lower premiums as they claim less.

This menu-based product in which you build the cover around each family member is an interesting development for the PMI industry and brings the “in” back into insurance, making customers partners in controlling medical inflation.

Penny O&#39Nions is principal at the Onion Group

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