Drewberry™ provide pensions, investment and insurance advice for Money to the Masses readers throughout the UK.

 

Guide to Continuing Personal Medical Exclusions (CPME)

Written by:
Stephen Moore
Head of Content at Drewberry™

 

Nadeem Farid on Keeping Company Health Insurance After Retirement

Nadeem Farid, Health & Wellbeing Expert at Drewberry, can offer retirement Medical Insurance advice

Although retirees usually have the luxury of having more time to sort out their new Health Insurance than those made redundant, they face an uphill struggle as they’re obviously older when they come to find cover.

How to get cheaper PMI

The average age of members of group company schemes tends to be between 35 and 45. However, around 40% of the individual PMI market is aged over 65 and, according to insurers, 98% of the average 60-year-old’s premiums are spent on claims.

This helps explain why the cost of private medical insurance individual cover is generally twice as much as group cover. It’s also a fact that individuals tend to claim on their policies far more often than group members. The mindset here is no doubt linked to ‘getting your money’s worth’, but, in reality, making small claims will just pump up the premium when it comes to renewal.

 

How to Reduce the Cost of PMI After Retirement

For most people, the best approach will be to look at options like adding an excess to your policy. This can help reduce premiums by up to 20%. Adding a six-week option will also bring the cost of private medical insurance down, as will removing non-core options such as therapy or outpatient benefits.

Transferring out of a Company Health Insurance scheme can be expensive

If you manage to go up to five years without making a claim then you’re in a position to switch between providers, which could also significantly reduce your premiums.

This means that securing PMI cover in later life can often be a two stage process: the first stage is to secure affordable cover; the second stage is to review your cover options at each renewal.

With luck, if you’ve avoided making a claim, you’ll be in a position to increase your cover or, eventually, reduce your premiums (by switching provider).

Adding an excess can lower the cost of Medical Insurance

Medical Insurance can be a lot like car insurance, as it all comes down to protecting your ‘no claims bonus’. This can mean self-funding for smaller claims also becomes an option as paying for a specific treatment yourself can save your premiums from being hiked down the road.

It can also be worth looking at friendly society-style policies from providers such as Exeter, April UK or Freedom. They may be more expensive at the start but it means you get some premium stability.

Older Britons should not be scared of the cost of private medical insurance There are many options available to help you get the best deal and cover.

The big attraction of this is that the cost of private medical insurance doesn’t rise due to claims experience – although premiums will rise with age. It can also be worth a married couple applying for cover from different providers to get the best deal.

Overall, there are plenty of options when it comes to PMI for older people, but it means deciding what’s most important, setting a price ceiling and managing your claims appropriately.

Compare Top 10 UK Insurers
  Takes approx. 60 seconds
 - 
Need help? 
Call us on 
 

Emma Wilson on Continuing Group Health Insurance After Redundancy

Where an owner or company director with Medical Insurance is made redundant, a company may arrange a Health Insurance continuation scheme, where it continues to fund cover for them on a personal level when they leave work. This can be an arrangement of 12 months, or in some cases more, depending on the nature of the policy and the company involved.

Ask your company about a continuation policy to avoid your cover running out and the expensive cost of private medical insurance.

This approach often extends to companies that employ a partnership structure – so Drewberry often deals with senior accountants and lawyers who were partners in their firms before they left.

Unfortunately, for more than 90% of people covered by Business Health Insurance, their cover just stops when they leave, retire or are made redundant. This means they have to find their own cover and this is where problems arise.

 

What is the Best Medical Insurance Underwriting for Individuals?

Many larger companies have medical history disregarded (MHD) Health Insurance, which means there’s no individual underwriting and that scheme members enjoy complete coverage.

This is the best Health Insurance underwriting for the policyholder, but it’s only available for group schemes of a certain size.

Individuals can only have this cover if they’ve been part of an MHD scheme already and are going forward with a continuing policy on those terms. However, if you are looking for a continuation scheme on an individual basis, the cost of private medical insurance with the MHD underwriting maintained will usually be hugely expensive.

As an individual, the cost of private medical insurance written on an MHD honoured basis is likely to be around double the premiums the company was paying – far more than most of us can afford.

For most people, the only affordable alternative is to take out a new individual PMI policy on a new underwriting basis. Choosing full medical underwriting (FMU) means you’ll need to submit a health declaration to your new PMI insurer. This means that you won’t get cover for conditions for which you’ve previously received treatment.

The cost of private medical insurance and your eligibility is also affected by any recent or previous conditions or health problems.

However, if you’re generally in good health and can safely say you haven’t suffered any medical conditions over the previous five years, you can choose to take out cover on a ‘new moratorium’ basis, which means you won’t need a health declaration.

Even so, if you have pre-existing conditions, you’ll still need to complete a two-year period from when the policy starts where you don’t receive any medical advice or treatment for that condition before you’ll be eligible to claim for that particular condition.

 

Adjusting Your Coverage Can Achieve Cheaper PMI

To complicate matters, underwriting isn’t the only factor to consider when looking for a continuation scheme. Typically, company schemes tend to offer ‘all singing, all dancing’ cover. But this is something that’s far too expensive for the majority of us, so be ready to compromise on what Health Insurance covers.

The most important consideration for those seeking continuation cover is to act fast. If there’s more than a 30-day break between policies, most insurers will decline cover on continued underwriting terms, leaving you with no option but to be re-underwritten from scratch.

This usually means that – at least initially – it’s better to stay with the same insurer when you leave your employer.

The time limit isn’t such a problem for those who might be retiring or working their notice, but for those who are made redundant it can be a major headache. They tend to get relatively little notice before finding themselves out of work and with no PMI cover.

This means they have some tough choices to make. Not least because the cost of private medical insurance will probably go up due to them having to pay two months’ premiums at the outset as they’ll need to pay the back premiums even if the policy wasn’t used – remember when seeking a continuation policy, there can’t be any break in cover.

Compare Top 10 UK
 Health
Insurers
 
Takes approx. 60 seconds
Level of Cover
Excess
Date of Birth
REVIEWS
EXCELLENT
4.93 / 5 Average
1,222 Reviews
A
Overall Rating
Really, really helpful! Stopped me from signing up with an unhelpful company, and did basically all of the legwork for me in signing up with the right one. I can't have been the most helpful client as I'm 19 and only just started looking into it last week, but he took all the questions in stride! Put up with me turning to ask my dad questions every 2 minutes as well. I was helped by 2 workers; Sam and Nick. Thank you very much to both!
L Finch
Overall Rating
Good communication and follow ups. Friendly. A thorough research for my insurance needs.
M
Overall Rating

Sam Barr-Worsfold was very helpful and provided excellent customer service. Sam discovered I was paying too much premium for my current cover. Sam recommended and helped moved to a new cover with lower premium that provided the level of cover (terms required stated in the provider's policy) I wanted. I recommend highly recommend Sam and Drewberry Insurance. Thank you Sam.
Anonymous
Overall Rating
Thorough, knowledgeable and great communication
Anonymous
Overall Rating
Went through each policy in detail and made sure I was getting the correct one for me