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Private Health Insurance vs Cash Plans A Guide

Private Health Insurance and Cash Plans – What is the Difference?


Private Medical Insurance (PMI) provides secondary medical care (hospital treatment) for serious conditions at a generally faster speed, in more comfortable surroundings than the NHS.


Cash plans provide support for everyday healthcare costs such as dental care. You pay a monthly premium, then claim back cash when you have to pay out for regular health care costs.


PMI premiums usually range from around £50-£150 per month; cash plans typically start at around £10 per month.


Another notable difference is that the price of a cash plan is generally not affected by your age (though some providers will sometimes charge higher rates for over 65’s), whereas for Private Medical Insurance it is always taken into consideration when calculating your premium.


What Does a Cash Plan Cover?


Cash plans help you budget for everyday health costs for your family. You pay a monthly premium, then claim back the costs of the specialists you see. These specialists can include:

  • Optical - eye tests, prescription glasses, contact lenses and prescription sunglasses
  • Dental – Check-ups and treatments
  • Complementary therapies – physiotherapy, osteopathy, chiropractic, acupuncture and homeopathy treatment
  • Chiropody – Treatments for your feet


What does private medical insurance cover?


Your monthly PMI premium will cover you for private consultants, diagnosis and treatment, with the level of treatment you are entitled to – which is determined by the type of cover you have. PMI will generally cover you for:

  • Diagnosis of serious health conditions by a private consultant – this includes tests such as scans, x-rays or blood tests
  • Treatment of illness or injury – This could include surgery, drugs or psychiatric treatment
  • Aftercare – recovery in a private en-suite hospital room, with superior facilities


Private health insurance is designed to cover you to have secondary medical treatment privately, rather than using the NHS. A health cash plan won’t cover you for expensive surgeries and isn’t designed to replace the NHS as a source of secondary care.


Which is a better solution for healthcare cover?


Which (or both) of these two approaches to healthcare cover you take depends on your needs. They are both a type of insurance, but cash plans are for managing everyday healthcare expenses.


Private Medical Insurance, on the other hand, is potentially a life saver – it is used for serious illness and injuries, and will protect you should the worst happen.


You might pay more for PMI and use it less often, but the peace of mind it provides - that it is there if you need it - is second to none.


If it is within your budget, then we generally recommend protecting your family with a Private healthcare policy (circumstances allowing). Cash plans are ideal if you’re on a tight budget, however, PMI could be the real life saver and life changer.