Health Insurance Jargon Explained Decoding Your Policy Documents
Struggling to understand your private medical insurance documents? You're not alone. As an FCA-authorised UK broker that has arranged over 900,000 policies of various kinds, WeCovr is here to translate the jargon. This guide decodes the complex terms in your PMI policy, helping you make informed decisions about your health.
Plain-English guide to PMI terminology including excesses, moratoriums, underwriting, network providers, and policy limit structures that confuse customers
Private Medical Insurance (PMI) offers peace of mind and faster access to treatment, but the policy documents can feel like they're written in another language. This comprehensive guide will walk you through every key term, transforming you from a confused customer into a confident policyholder.
Understanding the Basics: What is Private Medical Insurance (PMI)?
Private Medical Insurance, often called private health cover, is an insurance policy designed to cover the costs of private medical treatment for acute conditions that arise after your policy begins.
Think of it as a way to complement the services offered by our National Health Service (NHS). While the NHS provides excellent care, it faces significant pressures. For instance, according to NHS England data from early 2024, the referral-to-treatment waiting list involved over 7.5 million treatment pathways. PMI gives you an alternative, allowing you to bypass long waiting lists for eligible conditions and receive treatment more quickly.
The Golden Rule: Acute vs. Chronic Conditions
This is the most important concept to grasp in UK private medical insurance:
- Acute Condition: A disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery. Examples include a broken arm, appendicitis, hernias, or the need for a joint replacement. PMI is designed for these.
- Chronic Condition: A disease, illness, or injury that has one or more of the following characteristics: it needs long-term monitoring, has no known cure, is progressive, or is likely to recur. Examples include diabetes, asthma, high blood pressure, and arthritis. Standard UK PMI policies do not cover the long-term management of chronic conditions.
If you develop a condition that is initially diagnosed as acute but later becomes chronic, your PMI policy will typically cover the initial diagnostic tests and treatment to stabilise it. However, the ongoing, long-term management will then revert to the NHS.
The Application Process: Underwriting Explained
Underwriting is the process an insurer uses to assess your health and medical history to decide whether to offer you cover and on what terms. It determines what will and won't be covered, particularly concerning conditions you've had in the past. There are two main types for new policies in the UK.
1. Moratorium Underwriting
This is the most common type of underwriting for individuals and families because it's quick and straightforward.
- How it works: You don't need to complete a detailed medical questionnaire. Instead, the policy automatically excludes treatment for any medical condition you've had symptoms, treatment, or advice for in the five years before your policy start date.
- The "Rolling" Moratorium: These exclusions can be lifted. If you go for a continuous two-year period after your policy starts without needing any treatment, advice, or medication for that specific pre-existing condition, it may become eligible for cover. This is often called the "2-1-2" rule (a two-year symptom-free period on a policy that has been active for at least one year, covering conditions that were present up to two years before starting).
Real-Life Example: Sarah took out a policy with moratorium underwriting on 1st November 2025. Two years prior, she had some physiotherapy for minor knee pain. For the first two years of her policy (until 1st November 2027), any issues with her knee will be excluded. However, if her knee causes her no trouble at all during this period (no pain, no check-ups, no medication), then from 1st November 2027, she could be covered for new knee problems.
| Moratorium Underwriting | Description |
|---|---|
| Pros | ✅ Fast and simple application process. ✅ No need to disclose your full medical history upfront. ✅ Pre-existing conditions can eventually become covered. |
| Cons | ❌ Lack of certainty at the start of the policy. ❌ The insurer will investigate your medical history at the point of a claim, which can sometimes lead to delays or disputes. |
2. Full Medical Underwriting (FMU)
This method provides more certainty from day one but requires more effort during the application.
- How it works: You complete a detailed questionnaire about your medical history and that of your family. Based on your answers, the insurer decides what to cover. They will apply specific exclusions to your policy for any pre-existing conditions they identify. These exclusions are usually permanent.
- Clarity from the Outset: Your policy documents will clearly list any conditions that are not covered. There are no grey areas.
Real-Life Example: David applies for a policy with FMU. He declares that he had treatment for a slipped disc five years ago. The insurer reviews this and adds a specific exclusion to his policy stating, "No cover for any treatment related to the lumbar spine." David knows from day one that he cannot claim for his bad back, but he is covered for everything else as per the policy terms.
| Full Medical Underwriting (FMU) | Description |
|---|---|
| Pros | ✅ Complete clarity from the start about what is and isn't covered. ✅ The claims process can be faster as medical history is already declared. ✅ Premiums can sometimes be lower if you have a clean bill of health. |
| Cons | ❌ Long and detailed application process. ❌ Exclusions for pre-existing conditions are usually permanent. ❌ You must be very thorough with your disclosures to avoid invalidating your policy. |
Switching Providers: Continued Personal Medical Exclusions (CPME)
If you already have a PMI policy and want to switch to a new insurer, you can often do so on a 'CPME' basis. This means the new insurer agrees to continue with the same underwriting terms and exclusions you had with your old provider, ensuring you don't lose cover for conditions that had become eligible under a moratorium.
Decoding Your Policy Costs: Premiums, Excesses, and Limits
Understanding the financial side of your policy is crucial. Your costs are primarily determined by three things: your premium, your excess, and your policy limits.
Premiums
Your premium is the regular amount you pay (usually monthly or annually) to keep your health insurance active. Insurers calculate this based on several risk factors:
- Age: Premiums increase as you get older, as the likelihood of needing treatment rises.
- Location: Treatment costs vary across the UK. Living in or near major cities like London, where private hospital costs are higher, will typically result in higher premiums.
- Level of Cover: A comprehensive policy with extensive outpatient cover and optional extras will cost more than a basic inpatient-only plan.
- Excess Level: Choosing a higher excess will lower your premium.
- Lifestyle: Some insurers may ask about smoking status or BMI, which can influence the price.
Excess (or Deductible)
The excess is the amount you agree to pay towards the cost of a claim before the insurer pays the rest. It's a way of sharing the cost and helps keep premiums affordable.
- How it works: You can typically choose an excess amount, for example, £0, £100, £250, £500, or more.
- Per Claim vs. Per Year: Most policies apply the excess per policy year. This means you only pay it once per year, regardless of how many claims you make. Some policies may apply it per claim, which can be less cost-effective if you need treatment for multiple unrelated conditions.
Real-Life Example: You have a policy with a £250 excess per policy year. You need a knee operation costing £4,500. You pay the first £250 directly to the hospital, and your insurer pays the remaining £4,250. If you need another, unrelated treatment later in the same policy year, you will not have to pay the excess again.
Choosing a higher excess is a great way to reduce your monthly premium. If you are healthy and don't expect to claim, a £500 or £1,000 excess could save you a significant amount.
Policy Limits
Policy limits define the maximum amount your insurer will pay out for your treatment. These limits can be structured in several ways, and it's vital to check what your policy offers.
| Limit Structure | How It Works | Example |
|---|---|---|
| Overall Annual Limit | A total cap on the value of all claims you can make in a single policy year. | Your policy has a £1 million annual limit. Most policies have very high limits like this, often described as 'unlimited' for core cover. |
| Outpatient Cover Limit | A specific financial limit for outpatient services like consultations, diagnostic tests, and scans. | Your policy provides £1,000 for outpatient cover per year. A single MRI scan can cost £500-£800, so this can be used up quickly. |
| Therapies Limit | A limit on the number of sessions or financial value for therapies like physiotherapy, osteopathy, and chiropractic treatment. | Your policy might cover up to 8 physiotherapy sessions per year. |
| Mental Health Limit | A specific financial cap for psychiatric treatment, either as an inpatient or outpatient. | Your policy may have a £10,000 limit for mental health treatment. |
When comparing policies, always look beyond the headline price and examine these limits closely. A cheaper policy might have a very low outpatient limit, which could leave you with unexpected costs.
Accessing Treatment: Networks, Specialists, and Claims
Once you have a policy, how do you actually use it? The process involves hospital networks and getting your claim authorised.
Hospital Networks
Insurers don't work with every single private hospital in the UK. They create "hospital networks"—a list of approved facilities where you can receive treatment.
- Why they exist: By negotiating prices with a select group of hospitals, insurers can manage costs and keep premiums down.
- Network Tiers: Insurers often offer different network tiers. A standard list might include hundreds of quality private hospitals across the UK. An "extended" or "premium" list might add more prestigious, high-cost hospitals, particularly in Central London.
- Cost Savings: You can often reduce your premium by choosing a more restricted hospital network that excludes the most expensive facilities. If you don't live near London, there's little point in paying extra to include top London hospitals in your plan.
The Claims Process: A Step-by-Step Guide
Making a claim is usually a straightforward process, but you must follow the correct steps to ensure your treatment is covered.
- See Your GP: Your journey almost always starts with your NHS GP. If you have a symptom, you visit your GP for an initial diagnosis. If they feel you need to see a specialist, they will provide an 'open referral' letter.
- Contact Your Insurer: With your referral letter, you call your insurer's claims line. You will need your policy number and details of your condition.
- Get Pre-Authorisation: This is a critical step. The insurer will check your policy to confirm you are covered for the condition and the required treatment. They will then provide you with an authorisation number and help you find an approved specialist from their list. Never book treatment without getting pre-authorisation, or your claim may be rejected.
- Receive Treatment: You attend your appointment with the specialist at a hospital from your chosen network. All costs are typically billed directly to your insurer.
- Pay Your Excess: If an excess applies to your policy, the private hospital will usually bill you for this amount directly.
Key Policy Terms You'll Encounter
Here is a glossary of other common terms you will find in your policy documents.
| Term | Plain-English Explanation | Example |
|---|---|---|
| Inpatient | You are admitted to hospital and occupy a bed for one or more nights. | A hip replacement surgery requiring a three-night hospital stay. |
| Day-patient | You are admitted to hospital for a planned procedure and occupy a bed, but you are discharged on the same day. | A cataract removal or an endoscopy. |
| Outpatient | You visit a hospital or clinic for a consultation, test, or scan, but you are not admitted to a hospital bed. | Seeing a specialist dermatologist or having an MRI scan. |
| Benefit / Level of Cover | The specific treatments, services, and financial amounts your policy includes. | A "mid-range" benefit level might include full inpatient cover but a £1,000 limit for outpatient services. |
| No Claims Discount (NCD) | A discount applied to your premium at renewal if you haven't made a claim in the preceding policy year. It works like car insurance; making a claim will typically reduce your NCD level. | You might start with a 0% NCD and build it up to 70% over several claim-free years. |
| Six-Week Option | A popular cost-saving feature. If the NHS can provide the inpatient treatment you need within six weeks of it being recommended, you agree to use the NHS. If the waiting list is longer than six weeks, your private cover kicks in. | You need a hernia operation. The NHS waiting list is 12 weeks, so your insurer authorises private treatment immediately. |
Optional Extras and Added Value Benefits
Most private medical insurance UK providers allow you to tailor your policy with optional extras. These increase your premium but provide more comprehensive cover.
Common Optional Add-ons:
- Mental Health Cover: Extends cover beyond the basic provision for psychiatric treatment, including access to therapists and psychologists.
- Dental & Optical Cover: Provides money back towards routine check-ups, dental treatments (like fillings), and the cost of glasses or contact lenses. This is often a cash-back benefit.
- Therapies Cover: Increases the limits for treatments like physiotherapy, osteopathy, and chiropractic care.
Beyond paid-for extras, insurers compete by offering a wealth of value-added benefits at no extra cost. These are designed to help you stay healthy and manage your wellbeing proactively.
- Digital GP Services: 24/7 access to a GP via phone or video call, allowing you to get medical advice and prescriptions quickly without leaving home.
- Wellness Programmes: Access to health and wellbeing advice, stress-counselling helplines, and fitness tracking apps.
- Discounts and Rewards: Many insurers partner with gyms, health food brands, and travel companies to offer their members exclusive discounts.
As a WeCovr client, you get even more. In addition to the benefits from your chosen insurer, we provide complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero, to support your health goals. Furthermore, customers who purchase PMI or Life Insurance through us are eligible for discounts on other types of cover, such as home or travel insurance.
Navigating the Market with an Expert PMI Broker
The UK private health cover market is vast and complex, with dozens of providers and hundreds of policy combinations. Trying to navigate this alone can be overwhelming. This is where an independent broker like WeCovr can be invaluable.
As an FCA-authorised broker, our job is to act on your behalf, not for the insurers.
- Expert Advice: We demystify the jargon and help you understand what level of cover is right for your unique circumstances and budget.
- Market Comparison: We use our expertise and technology to compare policies from a wide range of leading UK insurers, ensuring you get the best possible terms and price.
- No Extra Cost: Our service is free to you. We are paid a commission by the insurer you choose, so you get expert, impartial advice without paying a penny extra.
- Ongoing Support: We are here to help you at renewal or if you need to make a claim, acting as your advocate.
With high customer satisfaction ratings, WeCovr has a proven track record of helping thousands of UK customers find the right protection.
Do I need to declare every past illness for a moratorium policy?
What happens if an acute condition becomes chronic?
Can I change my excess or hospital network mid-policy?
Is private medical insurance in the UK tax-deductible?
Feeling clearer about PMI jargon but still want expert guidance? The team at WeCovr is ready to help. As independent, FCA-authorised brokers, we compare plans from across the UK's leading providers to find the perfect fit for your needs and budget, all at no cost to you.
Get your free, no-obligation PMI quote today and take control of your health journey.
Related guides
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!