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Understand the most common health insurance terms used when comparing private medical insurance policies in the UK.
At Tessa Alliance, we believe health insurance should be explained in plain English.
When researching health insurance in the UK, it doesn't take long before you're faced with a long list of industry terms, policy jargon and technical language. From underwriting methods and hospital lists to excesses and pre-authorisation, understanding the terminology can sometimes feel as challenging as choosing the policy itself.
The good news is that private medical insurance (PMI) is often much simpler than it first appears. Whether you're considering cover for yourself, your family or your employees, understanding the key terms used by insurers will help you compare policies more effectively and make informed decisions about your healthcare.
At Tessa Alliance, we believe health insurance should be explained in plain English. This glossary has been created to help you understand the most common health insurance terms you'll come across when comparing private medical insurance policies in the UK.
Health insurance, often referred to as Private Medical Insurance (PMI), is designed to help cover the cost of eligible private medical treatment.
Rather than replacing the NHS, private medical insurance works alongside it. Many people continue to use NHS services for routine healthcare while using their PMI policy to access faster diagnosis, specialist consultations, diagnostic tests and treatment when they need it.
The main reasons people choose private health insurance include:
The exact benefits available depend on the insurer and policy selected.
One of the most important terms in private medical insurance is an acute condition.
An acute condition is a disease, illness or injury that is likely to respond to treatment and allow you to return to your previous state of health.
Examples may include:
Private medical insurance is primarily designed to treat acute conditions.
Understanding this distinction is important because it forms the basis of most PMI policies.
A chronic condition is generally a long-term medical condition that requires ongoing monitoring, management or treatment.
Examples can include:
Most private medical insurance policies do not cover the ongoing management of chronic conditions because they are designed to provide treatment for conditions that can be cured, controlled or significantly improved.
This is one of the most misunderstood areas of health insurance and something many customers ask about before taking out cover.
A pre-existing condition is any illness, injury, symptom or medical concern that existed before your policy started.
This doesn't necessarily mean the condition will never be covered, but it does mean insurers will assess it differently depending on the underwriting method chosen.
Examples could include:
Understanding how pre-existing conditions are treated is one of the most important parts of choosing a health insurance policy.
Underwriting is the process insurers use to assess your medical history and determine how pre-existing conditions will be treated under the policy.
Most major UK insurers, including Bupa, AXA Health, Vitality, WPA, Aviva and The Exeter, offer several underwriting options.
The underwriting method you choose can have a significant impact on future claims.
Moratorium underwriting is the most common underwriting method used in the UK private medical insurance market.
One reason it is so popular is because there is usually no lengthy medical questionnaire to complete when applying.
Instead, insurers automatically exclude conditions for which you have experienced symptoms, sought medical advice, received treatment or taken medication during a specified period before joining, usually the previous five years.
However, these exclusions are not always permanent.
If you remain free from symptoms, treatment, medication and medical advice for a continuous period after joining the policy, typically two years, the condition may become eligible for cover again.
Many people choose moratorium underwriting because it provides a quick and straightforward application process.
Full Medical Underwriting requires you to provide detailed information about your medical history when applying for cover.
The insurer reviews this information and confirms which conditions will be covered and which conditions will be excluded.
The main advantage of FMU is certainty.
Rather than discovering exclusions when you need treatment, you know from the outset exactly where you stand.
Some customers prefer FMU because it provides greater clarity, particularly if they have a complex medical history.
Continued Personal Medical Exclusions, often shortened to CPME, is commonly used when switching from one insurer to another.
Rather than reassessing your entire medical history, the new insurer usually accepts the exclusions already applied by your existing insurer.
This can make changing providers significantly easier and helps maintain continuity of cover.
CPME is frequently used by individuals and businesses who want to move to a different insurer while preserving the underwriting position they have already established.
Medical History Disregarded underwriting is one of the most valuable forms of underwriting available.
It is commonly found on larger company health insurance schemes.
Under MHD, eligible employees are usually accepted without personal medical exclusions being applied.
This means employees can often access cover without concerns about previous medical conditions affecting eligibility.
Many businesses see MHD as a particularly attractive employee benefit.
A premium is the amount paid to maintain your health insurance policy.
Premiums are usually paid monthly or annually.
The amount you pay can be influenced by factors such as:
While affordability is important, it is equally important to understand the value being provided.
The cheapest policy is not always the most suitable.
An excess is the amount you agree to contribute towards a claim before the insurer pays the remaining eligible costs.
For example, if you choose a £250 excess and require eligible treatment costing £4,000, you would normally pay the first £250 while the insurer covers the remainder.
Increasing your excess can often help reduce your premium.
Many policyholders use excesses as a way to balance affordability and comprehensive cover.
Out-patient treatment refers to treatment that does not require admission to hospital.
Examples include:
Out-patient cover is one of the most customisable areas of private medical insurance.
Different insurers offer varying levels of outpatient cover, allowing customers to tailor policies to suit their budget.
In-patient treatment applies when you are admitted to hospital and stay overnight.
This typically includes:
In-patient treatment forms the foundation of most PMI policies.
Day-patient treatment involves being admitted to hospital for treatment but being discharged on the same day.
Advances in medical technology mean many procedures that previously required overnight stays can now be completed as day-patient treatments.
A consultant is a senior specialist doctor responsible for diagnosing conditions and recommending treatment.
Most health insurance claims involve a referral to a consultant who will assess symptoms and determine what investigations or treatment are required.
A specialist is a healthcare professional with expertise in a specific medical field.
Examples include:
Private medical insurance often provides faster access to specialists compared to traditional referral routes.
Diagnostic tests are investigations used to identify the cause of symptoms.
Common examples include:
Quick access to diagnostic testing is one of the main reasons many people choose private medical insurance.
Many health insurance policies now include access to private GP services.
These services often provide:
The convenience of being able to speak with a GP quickly is a benefit many policyholders value highly.
A hospital list determines which hospitals you can access under your policy.
Most insurers offer several levels of hospital access ranging from restricted local networks to nationwide access including many leading private hospitals.
Hospital choice can significantly influence premium costs.
A hospital network is the group of hospitals and facilities approved by an insurer.
Using hospitals within the network helps ensure treatment costs are covered in accordance with your policy terms and conditions.
Open referral is a system used by some insurers where they recommend a selection of approved consultants rather than allowing unrestricted consultant choice.
The aim is to help manage costs while maintaining high standards of care.
Guided Care is a treatment pathway used by some insurers.
Rather than allowing unrestricted consultant selection, members are guided towards approved specialists and facilities.
Policies with Guided Care options often benefit from lower premiums.
Cancer cover is often considered one of the most valuable benefits available within private medical insurance.
Depending on the insurer, cover may include:
The level of cancer cover can vary significantly between providers.
Mental health support has become increasingly important within modern health insurance policies.
Benefits may include:
Many insurers have expanded their mental health benefits in recent years.
Physiotherapy cover helps support recovery from injury and musculoskeletal conditions.
Many policies allow direct access to physiotherapy without requiring a consultant referral first.
This can speed up access to treatment and rehabilitation.
Therapies cover may include:
Availability varies between insurers and policy levels.
Dental cover is often available as an optional add-on.
Benefits may contribute towards:
Cover levels vary significantly between providers.
Optical cover can help contribute towards:
Like dental cover, it is usually offered as an optional enhancement.
The NHS Six Week Option is a feature designed to reduce premiums.
Under this arrangement, policyholders agree to use the NHS if treatment can be provided within six weeks.
If the NHS cannot meet that timeframe, private treatment may be authorised instead.
Some insurers operate a No Claims Discount system.
Similar to motor insurance, members who do not claim may receive higher discount levels.
Different insurers apply No Claims Discounts in different ways.
Pre-authorisation is the process of obtaining approval from your insurer before treatment takes place.
This helps confirm that the proposed treatment is covered under the policy.
Obtaining pre-authorisation can help avoid unexpected costs and ensure claims proceed smoothly.
A waiting period is the amount of time that must pass before certain benefits become available.
Waiting periods help prevent individuals from purchasing insurance solely to claim immediately.
Not all benefits have waiting periods, and the rules vary between insurers.
Company health insurance is arranged by employers for employees.
Many businesses view PMI as an investment in employee wellbeing rather than simply an expense.
Benefits can include:
Group PMI refers to private medical insurance arranged for multiple employees under one policy.
Group schemes often benefit from enhanced underwriting options and may provide better value than individual arrangements.
SME health insurance is designed specifically for small and medium-sized businesses.
It provides employers with a practical way to offer healthcare benefits without the complexity of large corporate schemes.
Corporate health insurance is typically designed for larger organisations.
These schemes often include bespoke benefits, enhanced underwriting options and wider wellbeing support.
An Employee Assistance Programme provides confidential support services to employees.
Support may include:
EAPs are commonly included within broader employee wellbeing programmes.
For many people, the ability to access consultations, diagnostics and treatment more quickly makes private medical insurance a worthwhile investment.
This depends on the insurer and underwriting method selected. Some conditions may be excluded, while others may become eligible for cover over time.
Yes. Many people switch providers using CPME underwriting, helping preserve their existing underwriting position.
In the UK, the terms Private Medical Insurance, PMI and health insurance are generally used interchangeably.
Premiums can increase due to age, medical inflation, claims experience and changes in healthcare costs.
Health insurance terminology can initially seem confusing, but understanding the key terms used within private medical insurance policies makes comparing cover much easier.
At Tessa Alliance, we believe health insurance should be straightforward, transparent and easy to understand.
Compare leading UK health insurance providers and get clear guidance from Tessa Alliance before choosing cover.
