If you begin to feel unwell, the first port-of-call is normally your GP. If they feel that further diagnosis or treatment is needed, there are three basic levels of care which are relevant to private health insurance, known as In-, Out- and Day-Patient..

Fundamentally, all insurers offer similar levels of In- and Day-Patient treatment, which will typically be covered in full. Where policies differ, is in their coverage of Out-Patient treatments.

The most comprehensive policies will cover Out-Patient treatment in full. However, you can reduce the cost of a policy by choosing to cover only the first few visits each year, or by covering only certain types of diagnostic test.

Here is an example of how reduced out-patient cover can dramatically reduce premiums.

The second option above would cover the policyholders for two consultations each per year for diagnostic tests that lead to In- or Day-Patient treatment. This may or may not be sufficient, depending on your circumstances. Your health insurance adviser will be happy to help you in making the right decision for your level of Out-Patient cover.

The second option above would cover the policyholders for two consultations each per year for diagnostic tests that lead to In- or Day-Patient treatment. This may or may not be sufficient, depending on your circumstances. Your health insurance adviser will be happy to help you in making the right decision for your level of Out-Patient cover.

An example of the difference the Aviva Trust list could make to your premium is below.

To see which hospitals are covered in your area, why not use our hospital finder tool?

Unlike with car insurance, you will normally begin a new health insurance policy with a high level of No Claims Discount. This will decrease exponentially, the more the policy is claimed upon. Different insurers will begin new policies on a different level of No Claims Discount.

A "switch" policy will also benefit from a variable No Claims Discount - however, this is almost always lower than if you started a new policy. For more details on switch policies, see the "Underwriting" section.

As an illustration, a No Claims Discount of 69% makes an enormous difference to the premium compared to if you had made several claims on a previous policy.

A large intermediary can often offer a higher level of initial No Claims Discount compared to the insurer themselves - hence the fact that a quality intermediary such as Usay Compare will often be cheaper than going direct to the insurer.

The six-week option, which some insurers offer, limits your claims to those circumstances where there is at least a six-week waiting list on the NHS for the treatment required. This gives the policyholder the security of knowing that they will wait a maximum of six weeks for their treatment whilst significantly reducing their premium.

The potential drawback of the six-week option is that NHS waiting times for cancer treatment are very often less than six weeks, meaning that your insurance policy will not cover you for treatment. If your goal in taking out private medical insurance is to be assured of private cancer treatment, then the six-week option should be avoided.

An example of how the six-week option can affect premiums is below.

Many private medical insurance policies include the option of paying an excess, meaning that you must pay the first part of a claim, up to a given annual limit. For most policies, an excess will be per person, per year: so the excess is the total of what you would pay in a given year for your treatment. Before you sign up for a policy with an excess, check with your health insurance adviser that the excess is per year and not per treatment.

Below is an illustration of how different levels of excess can lower the cost of a private medical insurance policy.

In conclusion, it should be obvious that buying a health insurance policy on price is undesirable. We have examined a range of options between £411 and £2110, none of which could be recommended as "the right policy" without taking into account the client's individual circumstances. It is up to the client and the adviser to determine the facets of a policy which are most valuable to the client, and to seek them out at the best possible price.

It should be noted that some conditions will never be covered by private medical insurance. Known as chronic conditions, these are ailments which have at least one of the following conditions.

• Continues indefinitely and has no known cure;
• Comes back or is likely to come back;
• Is permanent;
• Means you need to be rehabilitated or specially trained to cope with it;
• Needs long term medical care (by this we mean regular monitoring, consultations, check-ups, examinations or tests to assess your state of health).

In addition, private medical insurance will never cover:

• Accident & Emergency Services
• Conditions related to Drug abuse, HIV or AIDS
• War & Riots
• Cosmetic surgery for vanity purposes.

For all non-chronic conditions, the way the policy is underwritten will affect the conditions which are covered.

A simple rule of thumb is that if you have claimed in the past five years and wish to change insurer, you should consider switching to a Continued Medical Exclusions policy. If you have remained symptoms, treatment and advice-free for a condition over the past five years, you are likely to benefit from a new policy with a Moratorium style of underwriting, which will often be less expensive.

This is the most common type of underwriting. Any condition for which you have had symptoms, treatment or advice for in the past five years will not be covered until you remain free of symptoms, treatment or advice for two years; after which, the condition will be covered in full.

For example, if you had treatment for a stomach ulcer in 2006 and took out your new policy in January 2010 with Moratorium underwriting, you would not be covered for anything related to a stomach ulcer until January 2012. If you were (for instance) to have a recurrence of the stomach ulcer in May 2011, you would not only have to seek treatment on the NHS, but the Moratorium period would begin again, meaning that you would not be covered for the condition on your private medical insurance policy until May 2013.

The major advantage of this type of underwriting is that you are not required to disclose any details of your medical history, nor fill in any forms when applying for private medical insurance. The policy can be set up over the telephone and cover can begin immediately.

If you have a condition for which you have had symptoms, treatment or advice in the past five years, but which you wish to be covered straight away, there is the possible option of Full Medical Underwriting. This involves filling in forms on medical history and may involve a medical examination. It cannot be started immediately.

If, for example, you had high blood pressure, there is a chance that the underwriters may consider covering this immediately without waiting out the moratorium period, so your adviser may recommend that you opt for Full Medical Underwriting. It must be noted, however, that there is a chance that the condition may not be covered or may be excluded for a period of time, so it is important to seek well-informed advice.

If a client with a Full Medical-Underwritten policy switches from one insurer to another, they can choose Continued Medical Exclusions underwriting. The advantage is that anything for which you have claimed on the policy in the past will remain covered by the new insurer. There are two disadvantages - firstly, as the name suggests, any conditions excluded from the previous policy will remain excluded from the new one (even if they were more than five years ago) and secondly, you will start on a lower initial No Claims Discount than you would get with a brand new Moratorium-underwritten policy.