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Comment - Keith Smout,senior healthcare consultant, SBJ Benefit Consultants

As sales of individual PMI continue to struggle, might a purely corporate PMI market emerge in the future?

November 2008 News

Keith Smout, senior healthcare consultant, SBJ Benefit Consultants

While it is true that sales of individual private medical insurance (PMI) are in decline compared with corporate schemes, there will always be a need for individual PMI cover.

When finances are tight the lone self-employed worker might consider PMI as a luxury. However, should he or she require immediate treatment for a non-life threatening illness, the private route is far more accommodating than the NHS.

Not only will they be able to receive immediate treatment but will be able to choose a time and a place to fit around their own work commitments.

With NHS waiting times still not showing a huge sign of improvement, private treatment can prove to be the most flexible route to take.

Of course, the main stumbling block for individuals looking to take out PMI is the cost factor. Individual polices can be three or four times more expensive than the premiums if you are a member of a corporate scheme and this is the main reason very few members continue with a policy in their own right after they leave a corporate plan.

However, there are employees after leaving a corporate scheme and in particular those with serious health issues that would be keen to remain in the private sector rather than falling back on the NHS, which might mean that they may have to find a new consultant, place of treatment and time not convenient to them.

In recent times insurers have tried to encourage people to take out an individual policy, offering new policy innovations such as no claims discounts, cash returns, discounts not normally associated with PMI, such as cheaper gym membership and lifestyle benefits – all of which help to tie members into the scheme.

Polices are also being tailored to suit members rather than to pigeon hole them into one of their polices. Members can choose only those benefits that they consider may be important to them or think that they might use. For example, cheaper premiums would be available to cover only inpatient treatment or to not have psychiatric cover.

Finally, with the advent of comparison websites, members looking for individual cover would be able to find a policy to suit their budget.