Pay Upfront or Pay Monthly?

There are two ways of paying for private medical insurance: either by purchasing a private health care plan or by just paying for it as and when you need it. But which is best?

For some people paying for treatment as and when the need arises is not a problem. This applies to people who either have a very high income or a good degree of capital. This is not the majority of people. Statistics show that most people who use private health insurance are either part of a corporate scheme or are individuals and families who pay monthly premiums.

For most people then, paying regular medical insurance premiums is a way to cover themselves should they ever become ill. However there are disadvantages to this:

-You may never become ill and therefore will have paid out on premiums without ever having used the private health cover
-You may already have illnesses which will not be covered by your medical insurance provider
-There are many exclusions to health insurance policies, particularly if you are only paying for basic coer

An alternative is to save up and put money to one side to pay for treatment should you need it. However, recent evidence from the Association of British insurers reports that British people are loosing confidence in the benefits of saving. The research conducted by YouGov showed that Nearly three-quarters (73%) of consumers felt that the benefits of saving had fallen over the last year, compared to just over half (53%) in the third quarter.

One of the reasons people may not consider saving for ill health is that they do not consider what the costs of possible treatments might be. Below is a selection of operation costs taken from the website of Spire Murrayfield in Edinburgh:

Hip Replacement: £8,200 - £10,300
Cataract Removal £1,900 - £3,250
Haemorrhoids £1,575 - £3,075
Hernia £1,650 - £3,800
Breast Lump Removal £1,530 - £2,500
Carpal Tunnel Release £1,000 - £2,100

An advantage of upfront cash payments is being able to negotiate on price with hospitals and private clinics, something that is not possible if you have private medical insurance.

There is a company which gives you cash should you fall ill and allows you to choose where and how you spend it and again here you also have the option to barter on your treatment costs. Freedom Healthnet Ltd gives traditional cover but delivers cash straight into your bank account should you fall ill. If you compare health insurance premiums on the market you will find that they provide very cheap medical insurance across the board.

A compromise between saving and paying a high cost for medical insurance premiums could be to take out an inexpensive policy where your excess is very high. All you need to do here is make sure that you have the excess available. This type of policy is available from XS Health offers a comprehensive health insurance policy and there is a choice £1,500, £3,000 or £5,000 excess to pay. Premiums are as low as £55.83 a year and once your treatment costs get higher than your excess you have unlimited cover for a full year before you have to pay any more excess.