Health and medical insurances

It's when you need to make a claim that you realise just how wise investing in health and medical insurance can be.

Private medical insurance (PMI)

With NHS hospital queues still burgeoning private medical insurance is an appealing though often expensive buy.

And what you pay for is what you get. Premiums are worked out on the basis of age and the type of cover required. And there is a wide range of different insurances to choose from.

At the basic level PMI clicks in when you need specialist treatment or you need to go into hospital. Some policies cover you if the NHS cannot provide treatment within a certain period of time.

At the luxury end of the market there are policies that cover a wide range of medical services such as dentistry, eye care and even spectacles although the more a policy covers the higher the premium will be.

PMI is complicated for those approaching it for the first time. In order to make sure the policy you choose is the right one to meet your needs it is worth speaking to an adviser who has specialist knowledge in medical policies and can guide you through the maze of different offerings on the market.

Critical illness

Considering just how many lives are wrecked by critical illnesses such as heart disease, cancer and aids it is surprising that more people do not take out critical illness insurance.

The principle is straightforward; in the event of an illness being diagnosed the insurance company will pay out a lump sum. Often critical illness cover is combined with other types of insurance and may even provide an investment element such that a given sum will be paid out for example on the death of the insured.

Permanent health insurance (PHI)

PHI provides cover in the event that the insured is unable to work, and therefore to earn, due to illness or injury.

The premium cost will depend on the extent of the illnesses covered, the age of the policyholder and period of time that elapses between when the insured becomes ill and when a claim is made.

There is considerable choice between different covers offered by different insurers. The key is to choose a balance between the cover you need versus the cost of premium. A financial adviser with knowledge of the permanent health market can help you select the appropriate policy for you. If you are fortunate enough never to have to make a claim under your policy you may have some regrets at a later date but many people have been very grateful indeed that amongst all the other worries they had when they became unable to work they knew they did not have to think about how they were going to meet domestic bills and keep a roof over their head until they recovered.

Long-term care

We tend not to think about how to pay for long term care until one of our relatives has to go into a residential or nursing home.

Weekly costs can start at £250 and reach as much as £750 if 24 hour nursing support needs to be on hand. By paying either a monthly or single premium the insured can add to the amount currently available through state benefits to fund the cost of such care and this means having to deplete less of your assets to meet the cost.

This is why long-term care can form part of your discussion with your financial adviser. Especially so as there is a chance that long term care premium costs may become tax deductible in the future. There is no doubt however that the need for care is likely to increase as life expectancy continues to rise and with only limited care facilities available the costs are bound to rise.