Insurance · 3 August 2015

Unpacking the jargon terms associated with health insurance

New services like health insurance can be confusing if you don't know the terminology
New services like health insurance can be confusing if you don’t know the terminology

When purchasing a product or service for your business it is essential that you understand exactly what you are buying.

As with most financial products and services there can be a lot of jargon for you to understand with private medical insurance. To make it a bit easier, here are examples of some of the most common terms you might encounter when purchasing private medical insurance.

PMI

You will often hear private medical insurance referred to as PMI or IPMI (which is the term used to describe cover outside of the UK e.g. international private medical insurance).

Pre-existing conditions

Pre-existing conditions are medical conditions that existed prior to an insurance policy being taken out.

Underwriting

Underwriting will determine the cover you and your team will have for pre-existing conditions. For small business the most popular underwriting options are: continued personal medical exclusions (CPME), medical history disregarded (MHD), full medical underwriting (FMU) and moritorium underwriting. MHD and CPME will provide cover for pre-existing medical conditions that are covered under an existing policy, as well as any new conditions that may arise. Please note this could be subject to terms and conditions.

Chronic conditions

These are typically diseases, injuries or conditions that require long term treatment and monitoring, continue indefinitely with no known cure and are likely to reoccur. Examples of chronic conditions includes, diabetes, Crohn’s disease, arthritis and cystic fibrosis.

Acute conditions

These are usually diseases, injuries or conditions that are likely to respond quickly to treatment and that you will make a full recovery from. Examples include bronchitis, a broken bone and mastitis.

Diagnostic tests

These are tests which are carried out to help provide a diagnosis and understand the cause of your symptoms. These include x-rays, scans and blood tests.

Day-patient

A day-patient is a patient who is admitted to a hospital or clinic because they need to be medically monitored, but they don’t need to stay overnight.

In-patient

An in-patient is a patient who is admitted to hospital and who stays in a bed overnight or longer, for medical reasons.

Out-patient

Out-patient cover is for a patient who visits a hospital, clinic or consulting room but is not admitted as a day or in-patient, for example physiotherapy, counselling and MRI scans.

Medical inflation

Medical inflation is an inflationary factor applied to all PMI schemes each year to take into account the rising costs of treatment.

Excess

Excesses are offered to customers as a way of reducing their premiums. It is the amount of money you have to pay towards eligible treatment costs covered by your policy each year. You will only need to pay this should you make a claim and it will either be applied per claim or per policy year.

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ABOUT THE EXPERT

Hunter Ruthven was previously editor of Business Advice. He was also the editor of Real Business, the UK's most-read website for entrepreneurs and business leaders at the helm of growing SMEs.

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