Health Insurance Glossary 50 Common Terms Explained
Confused by private medical insurance jargon in the UK? WeCovr, an FCA-authorised broker trusted with over 800,000 policies of various types, is here to help. This A-Z glossary cuts through the complexity, making it easy to understand your private health cover options and find the right plan.
An A–Z guide to demystify private health insurance
Private Medical Insurance (PMI) offers a fantastic way to gain peace of mind, access prompt medical care, and bypass potential NHS waiting lists. However, the language used by insurers can often feel like a puzzle. From "moratorium underwriting" to "out-patient limits," understanding these terms is the first step towards choosing a policy that truly meets your needs.
This guide breaks down 50 of the most common terms into plain, simple English. We'll explain what they mean, why they matter, and how they affect your private health cover.
The Absolute Essentials: Understanding What PMI Is (and Isn't)
This is the most crucial section. Grasping these fundamental concepts will prevent any misunderstandings about what your policy is designed for.
1. Private Medical Insurance (PMI) Also known as private health cover, PMI is an insurance policy that covers the costs of private medical treatment for specific, curable conditions. Its primary purpose is to complement the NHS, not replace it. It gives you more choice over when, where, and by whom you are treated.
2. Acute Condition This is the cornerstone of PMI. An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery. Think of things like joint replacements, cataract surgery, or treatment for hernias. PMI is designed exclusively to cover acute conditions that arise after you take out your policy.
3. Chronic Condition A chronic condition is an illness that is long-lasting or recurring. It cannot be cured, only managed. Examples include diabetes, asthma, arthritis, and high blood pressure. Standard UK private medical insurance does not cover the treatment of chronic conditions. Management of these conditions remains with the NHS.
4. Pre-existing Condition This refers to any ailment, illness, or injury you had symptoms of, received advice for, or were treated for before your policy start date. This is a critical exclusion. PMI does not cover pre-existing conditions. The way insurers handle this depends on your underwriting type (see "Moratorium" and "Full Medical Underwriting" below).
5. Exclusions These are specific conditions, treatments, or circumstances that your policy will not pay for. Besides pre-existing and chronic conditions, common exclusions include routine pregnancy, cosmetic surgery, A&E visits, and drug abuse. Always read your policy document carefully to understand the exclusions.
Building Your Policy: Core Cover and Customisation
Every policy starts with a foundation and can be tailored with optional extras.
6. Core Cover This is the basic level of cover included in every PMI policy. It almost always includes costs for in-patient and day-patient treatment, which covers surgery, hospital stays, nursing care, and specialist fees when you're admitted to a hospital bed.
7. In-patient You are an in-patient if you are admitted to a hospital and stay overnight for treatment.
8. Day-patient You are a day-patient if you are admitted to a hospital for a procedure but do not need to stay overnight. This is common for minor surgeries like arthroscopy.
9. Out-patient This refers to any treatment or consultation where you are not formally admitted to a hospital bed. This includes specialist consultations, diagnostic tests, and therapies. Out-patient cover is usually an optional extra or is included in more comprehensive plans. Limiting your out-patient cover is a common way to reduce your premium.
10. Add-ons / Optional Extras These are additional benefits you can add to your core cover for an extra cost. Common add-ons include:
- Out-patient cover: For consultations and tests before a hospital stay.
- Mental Health Cover: For access to psychiatrists and therapists.
- Therapies Cover: For physiotherapy, osteopathy, and chiropractic treatment.
- Dental and Optical Cover: For routine check-ups and treatments.
11. Comprehensive Cover This is the highest level of cover available, typically including core cover plus extensive out-patient benefits, therapies, and often mental health support. It offers the most complete protection but comes with the highest premium.
12. Hospital List / Hospital Network Insurers have agreements with a network of private hospitals. Your policy will include a specific "hospital list" which dictates where you can receive treatment. A more extensive list, including premium central London hospitals, will increase your premium. Choosing a more restricted local list can be a great way to save money.
13. Guided Option / Guided Consultant List Some policies offer a "guided" route. Instead of choosing any consultant you wish, the insurer provides a shortlist of 3-5 pre-approved specialists for your condition. This helps the insurer manage costs, and in return, you receive a lower premium.
14. Mental Health Cover A crucial add-on for many. This provides cover for consultations with psychiatrists and psychologists, as well as in-patient or day-patient psychiatric treatment. The level of cover can vary significantly, from a set number of therapy sessions to more extensive residential care.
15. Therapies Cover Covers treatment from recognised practitioners like physiotherapists, osteopaths, and chiropractors. This is often essential for recovery from surgery or musculoskeletal injuries.
Managing Your Costs: Premiums, Excess, and Discounts
Understanding the financial elements of your policy is key to finding affordable cover.
16. Premium This is the regular amount you pay for your health insurance policy, either monthly or annually. Your premium is calculated based on your age, location, level of cover, excess, and medical history (if using Full Medical Underwriting).
17. Excess This is a fixed amount you agree to pay towards the cost of your treatment each policy year (or sometimes per claim). For example, if you have a £250 excess and your treatment costs £3,000, you pay the first £250 and your insurer pays the remaining £2,750. A higher excess leads to a lower premium.
| Treatment Cost | Your Excess | You Pay | Insurer Pays |
|---|---|---|---|
| £4,000 | £500 | £500 | £3,500 |
| £1,500 | £100 | £100 | £1,400 |
| £250 | £250 | £250 | £0 |
18. No Claims Discount (NCD) Similar to car insurance, many PMI providers offer a discount on your renewal premium for every year you don't make a claim. The NCD scale typically ranges from 0% to as high as 75%. Making a claim will usually reduce your NCD level at renewal.
19. Six-week Option This is a cost-saving option where your insurer will only pay for your treatment if the NHS waiting list for that procedure is longer than six weeks. If the NHS can treat you within six weeks, you will be treated by the NHS. This can significantly reduce your premium because it reduces the likelihood of a claim.
20. Co-payment A less common feature where you agree to pay a percentage of each claim, often in addition to your excess. For example, you might pay a £250 excess and then 10% of the remaining claim cost, up to a certain limit. This also lowers your premium.
21. Insurance Premium Tax (IPT) A tax charged on all general insurance premiums in the UK, including PMI. The standard rate is currently 12%, and this is automatically included in the premium you are quoted.
22. Self-insure This is the alternative to having insurance, where you choose to pay for any private medical treatment out of your own pocket. This can be extremely expensive; for example, a hip replacement can cost upwards of £13,000 privately.
The Patient Journey: How to Use Your Insurance
Here’s a step-by-step look at the terms you'll encounter when you need to make a claim.
23. GP Referral In most cases, your journey to private treatment starts with your NHS GP. You visit your GP, who assesses your symptoms and provides a referral letter to a private specialist if needed. This referral is what you use to start your claim with the insurer.
24. Open Referral Some insurers and GPs operate on an "open referral" basis. This means your GP refers you for a type of specialism (e.g., "a cardiologist") rather than naming a specific consultant. Your insurer will then guide you to an appropriate specialist from their approved network.
25. Virtual GP / Digital GP A growing number of PMI providers now include access to a 24/7 virtual GP service. This allows you to have a video or phone consultation with a GP at your convenience, often with the ability to get prescriptions or open referrals quickly.
26. Claim This is the formal request you make to your insurer to cover the cost of your treatment. The process usually involves contacting your insurer's claims line with your GP referral details before any appointments or treatment take place.
27. Diagnostics / Diagnostic Tests These are tests used to identify a medical condition, such as MRI scans, CT scans, X-rays, and blood tests. Cover for diagnostics is usually part of out-patient cover.
28. Specialist / Consultant A senior doctor who has expert knowledge in a particular area of medicine (e.g., a cardiologist for heart conditions, or an orthopaedic surgeon for joint problems). Your PMI covers the fees charged by these consultants.
29. Eligible Treatment Any medical procedure, test, or consultation that is covered under the terms and conditions of your policy. Your insurer must pre-authorise treatment to confirm it is eligible before you proceed.
30. NHS Cash Benefit An optional benefit that pays you a fixed amount of cash for every night you choose to use the NHS for in-patient treatment, even though you have private cover. It’s a way to get some value from your policy without claiming for private care.
The Fine Print: Underwriting and Policy Details
The method of underwriting determines how an insurer assesses your medical history and applies exclusions for pre-existing conditions. This is a critical choice you make when you first buy a policy.
31. Underwriting This is the process an insurer uses to evaluate risk and decide whether to offer you cover and at what price. For PMI, it's primarily about how they handle your past medical history.
32. Full Medical Underwriting (FMU) With FMU, you provide a full declaration of your medical history by completing a detailed questionnaire when you apply. The insurer assesses this information and may explicitly exclude certain conditions from your policy from day one. It provides clarity but requires more initial paperwork.
33. Moratorium Underwriting This is the most common type of underwriting. You don't have to declare your full medical history upfront. Instead, the insurer automatically excludes any condition you've had symptoms of, or received treatment for, in the 5 years prior to your policy start date. However, if you then go a continuous 2-year period after your policy starts without any treatment, advice, or symptoms for that condition, it may become eligible for cover.
34. Medical History Disregarded (MHD) This is a premium type of underwriting, usually only available for larger company schemes. As the name suggests, the insurer agrees to disregard your prior medical history and will cover pre-existing conditions (though chronic conditions are still typically excluded).
Here's a simple comparison of the main underwriting types:
| Feature | Full Medical Underwriting (FMU) | Moratorium Underwriting |
|---|---|---|
| Application Process | Long questionnaire about your medical history. | No medical questions upfront. Quick and simple. |
| Exclusions | Pre-existing conditions are clearly listed as exclusions on your policy documents from the start. | Blanket exclusion on conditions from the past 5 years. Can be unclear what is/isn't covered initially. |
| Claim Process | Generally faster, as the insurer already knows your history. | Can be slower, as the insurer may need to investigate your medical history at the point of a claim. |
| Best For | People who want absolute certainty about what is covered from day one. | People who haven't had any significant medical issues in the last 5 years and want a quick application. |
35. Policyholder The person who owns the insurance policy and is responsible for paying the premiums.
36. Dependant A person who is covered by the policyholder's insurance, typically a partner or children.
37. Cooling-off Period A legally required period, usually 14 days after you purchase the policy, during which you can cancel it and receive a full refund, provided you haven't made a claim.
38. Renewal At the end of your policy term (usually one year), your insurer will invite you to renew your cover for another year. They will provide a new premium based on your age, claims history (NCD), and medical inflation.
39. Annual Limit / Benefit Limit The maximum amount your insurer will pay out for eligible claims in a policy year. Some policies have limits on certain benefits (e.g., £1,000 for out-patient cover), while others offer an overall annual limit (e.g., £1 million). Many comprehensive policies now offer unlimited cover.
40. Grace Period A short period after your premium due date during which your policy remains active even if you haven't paid. If you don't pay by the end of the grace period, your policy will be cancelled.
Key Players and Regulations in the UK PMI Market
Knowing who's who can help you navigate the market with confidence.
41. Provider / Insurer The company that underwrites your policy and pays for your claims. The main providers of private medical insurance in the UK include Aviva, AXA Health, Bupa, and Vitality.
42. Aviva One of the UK's largest insurance companies, offering a wide range of PMI policies with flexible options.
43. AXA Health A leading global insurer with a strong presence in the UK health market, known for its comprehensive cover and wellness support.
44. Bupa A specialist health and care company, Bupa is one of the most recognised names in UK private healthcare, operating its own hospitals and clinics as well as providing insurance.
45. Vitality Known for its innovative approach, Vitality rewards healthy living by offering discounts on premiums and other perks for members who track their activity and stay healthy.
46. Broker An independent intermediary who can help you compare policies from different insurers to find the best PMI provider and plan for your specific needs and budget. A specialist PMI broker like WeCovr provides expert advice and can often access deals not available to the public, all at no extra cost to you.
47. Financial Conduct Authority (FCA) The UK's financial services regulator. All insurers and brokers, including WeCovr, must be authorised and regulated by the FCA, ensuring they treat customers fairly.
48. Health Screening A set of tests and examinations designed to detect potential health problems at an early stage. Some high-end PMI policies include a health screen as a benefit.
49. Community Rated Scheme A type of pricing for large corporate schemes where everyone in the company pays the same premium, regardless of their individual age or claims history.
50. Policy Document The legal contract between you and your insurer. It details all the terms, conditions, benefits, and exclusions of your cover. It's essential to read this document carefully.
Your Health and Wellness
Choosing the right health insurance is one part of a wider wellness strategy. Providers are increasingly rewarding proactive health management. At WeCovr, we support this by providing complimentary access to our AI-powered nutrition app, CalorieHero, to all our PMI and life insurance clients. Simple lifestyle habits can have a huge impact:
- Balanced Diet: Focus on whole foods, fruits, and vegetables.
- Regular Activity: Aim for 150 minutes of moderate-intensity exercise per week, as recommended by the NHS.
- Quality Sleep: Prioritise 7-9 hours of sleep per night to support mental and physical recovery.
- Stress Management: Techniques like mindfulness can lower stress levels, which benefits overall health.
By taking these small steps, you not only improve your wellbeing but may also benefit from lower premiums with providers like Vitality. Furthermore, clients who purchase PMI or life insurance through WeCovr often receive discounts on other types of cover, helping you protect your family's future more affordably.
Does private health insurance cover pre-existing conditions?
Is private medical insurance worth it in the UK?
Do I always need a GP referral to use my health insurance?
Ready to Find Your Perfect Plan?
We hope this glossary has armed you with the knowledge to navigate the world of private health cover with confidence. The next step is to see what options are available for you.
At WeCovr, our expert advisors are on hand to provide no-obligation, personalised advice. We'll compare leading UK insurers to find a policy that fits your needs and budget, all at no cost to you.
Get your free, no-obligation quote today and take the first step towards faster healthcare.
Why private medical insurance and how does it work?
What is Private Medical Insurance?
Private medical insurance (PMI) is a type of health insurance that provides access to private healthcare services in the UK. It covers the cost of private medical treatment, allowing you to bypass NHS waiting lists and receive faster, more convenient care.How does it work?
Private medical insurance works by paying for your private healthcare costs. When you need treatment, you can choose to go private and your insurance will cover the costs, subject to your policy terms and conditions. This can include:• Private consultations with specialists
• Private hospital treatment and surgery
• Diagnostic tests and scans
• Physiotherapy and rehabilitation
• Mental health treatment
Your premium depends on factors like your age, health, occupation, and the level of cover you choose. Most policies offer different levels of cover, from basic to comprehensive, allowing you to tailor the policy to your needs and budget.
Questions to ask yourself regarding private medical insurance
Just ask yourself:👉 Are you concerned about NHS waiting times for treatment?
👉 Would you prefer to choose your own consultant and hospital?
👉 Do you want faster access to diagnostic tests and scans?
👉 Would you like private hospital accommodation and better food?
👉 Do you want to avoid the stress of NHS waiting lists?
Many people don't realise that private medical insurance is more affordable than they think, especially when you consider the value of faster treatment and better facilities. A great insurance policy can provide peace of mind and ensure you receive the care you need when you need it.
Benefits offered by private medical insurance
Private medical insurance provides numerous benefits that can significantly improve your healthcare experience and outcomes:Faster Access to Treatment
One of the biggest advantages is avoiding NHS waiting lists. While the NHS provides excellent care, waiting times can be lengthy. With private medical insurance, you can often receive treatment within days or weeks rather than months.
Choice of Consultant and Hospital
You can choose your preferred consultant and hospital, giving you more control over your healthcare journey. This is particularly important for complex treatments where you want a specific specialist.
Better Facilities and Accommodation
Private hospitals typically offer superior facilities, including private rooms, better food, and more comfortable surroundings. This can make your recovery more pleasant and potentially faster.
Advanced Treatments
Private medical insurance often covers treatments and medications not available on the NHS, giving you access to the latest medical advances and technologies.
Mental Health Support
Many policies include comprehensive mental health coverage, providing faster access to therapy and psychiatric care when needed.
Tax Benefits for Business Owners
If you're self-employed or a business owner, private medical insurance premiums can be tax-deductible, making it a cost-effective way to protect your health and your business.
Peace of Mind
Knowing you have access to private healthcare when you need it provides invaluable peace of mind, especially for those with ongoing health conditions or concerns about NHS capacity.
Private medical insurance is particularly valuable for those who want to take control of their healthcare journey and ensure they receive the best possible treatment when they need it most.
Important Fact!
We can look at a more suitable option mid-term!
Why is it important to get private medical insurance early?
👉 Many people are very thankful that they had their private medical insurance cover in place before running into some serious health issues. Private medical insurance is as important as life insurance for protecting your family's finances.👉 We insure our cars, houses, and even our phones! Yet our health is the most precious thing we have.
Easily one of the most important insurance purchases an individual or family can make in their lifetime, the decision to buy private medical insurance can be made much simpler with the help of FCA-authorised advisers. They are the specialists who do the searching and analysis helping people choose between various types of private medical insurance policies available in the market, including different levels of cover and policy types most suitable to the client's individual circumstances.
It certainly won't do any harm if you speak with one of our experienced insurance experts who are passionate about advising people on financial matters related to private medical insurance and are keen to provide you with a free consultation.
You can discuss with them in detail what affordable private medical insurance plan for the necessary peace of mind they would recommend! WeCovr works with some of the best advisers in the market.
By tapping the button below, you can book a free call with them in less than 30 seconds right now:
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WeCovr is an insurance specialist for people valuing their peace of mind and a great service.👍 WeCovr will help you get your private medical insurance, life insurance, critical illness insurance and others in no time thanks to our wonderful super-friendly experts ready to assist you every step of the way.
Just a quick and simple form and an easy conversation with one of our experts and your valuable insurance policy is in place for that needed peace of mind!