The pro's and con's of an out-patient limit on your medical insurance

One of several ways to keep the costs of medical insurance down is to elect to limit out-patient benefit. This (depending on the insurer) will being the price down by 15% to 20% or thereabouts assuming a £ 1,000 limit on out-patient consultation benefit per person per annum.

For younger clients in particular who are likely not to claim so often this can often be a fantastic compromise, bringing the price of premiums down so as to be affordable whilst not fatally compromising the overall effect of having the cover.

It's important though to understand how different insurers police this limited out-patient cover. Some will only limit out-patient consultations with consultants and surgeons but still include costs of diagnostic testing in full whilst others will lump both together within the plan limits. Most will include the most expensive scans (e.g. MRI, CT and PET Scans) in full regardless of any out-patient limit whilst others offer a tick box approach allowing clients to choose exactly which version of the above to adopt.

There are also various levels of limits out there in the market. Some offer a range from nil to £ 1500, some just £ 1,000 and so forth.

Whatever your views on this cost saving and how your medical insurance plan needs to be structured one thing is clear to me. Anyone considering buying a medical insurance plan needs to take professional advice from an adviser like myself to ensure their out-patient cover works for them. The simple reason is that, almost without exception every PMI claim starts with out-patient benefit being claimed and many never progress any further. This means that whilst in-patient and day case cover is a vital element of a PMI plan, the 'coal face' of every PMI plan is the out-patient benefit and how it is set up by the client at point of sale and then how it is administered by the medical insurer.

I've been working in the medical insurance field since 1994 and have run my own practice since the end of 2010 and one of the most common themes I come across when speaking to new clients (who have existing cover in place) is dissatisfaction with how their O/P cover has been set up. Sometimes they've simply misunderstood how the plan works or what is covered but quite often the out-patient benefit just doesn't meet their current requirements. The most common situation is an older client (say aged 50 plus) who's had cover for many years but has a limited out-patient plan that simply no longer suits their lifestyle.

Either way, a review of the market following a more in-depth fact find with the client is often a simple way to adjust their cover and ensure the plan works for them moving forwards. 

Summing up, out-patient limits are certainly a viable strategy when setting up and managing your PMI. It's not for everyone however and what looks like a simple decision - slightly reducing the cover to lower monthly costs can have critical effects on the cover - you just need to discuss them with your adviser and understand the implications of what you are buying.

If you've got a plan with a limited out-patient benefit and would like a free review of your cover just drop me a line : philknight@pch.uk.com