Private Health Insurance Glossary
Plain-English definitions of the terms you’ll meet on a UK private health insurance policy.
A
Acute condition. A new medical condition that responds to treatment and resolves; the type of condition private medical insurance is primarily designed to cover. Distinct from chronic conditions, which require ongoing management.
Annual limit. The maximum the insurer will pay out for a particular benefit (or all benefits) in a policy year.
Authorisation. Confirmation from the insurer that a planned claim is covered, before the treatment goes ahead. Most claims need authorisation before the appointment.
B
Benefit limit. A cap on what the insurer will pay for a specific treatment category; outpatient, mental health, therapies and so on.
Benefit-in-kind (BIK). Tax treatment of employer-paid PMI. The premium counts as taxable employment income and is reported on the employee’s P11D.
C
Cancer cover. The PMI benefit covering diagnostic, treatment and follow-up costs for new cancer diagnoses. Often unlimited or very generously limited; varies by insurer in scope (NICE-approved drugs vs broader).
Chronic condition. A long-term condition that’s incurable, recurrent or requires ongoing management; diabetes, asthma, ongoing heart disease etc. Generally excluded from PMI as a category.
Claim. A request to the insurer to pay for treatment under the policy.
Continued Personal Medical Exclusions (CPME). A switching mechanism that lets you move insurer without losing accumulated underwriting decisions. The new insurer accepts the same exclusions and accepted conditions as your previous policy.
Co-insurance. A share of the claim cost the policyholder pays. Less common in UK PMI than in US health insurance; usually appears as an excess instead.
D
Deferred period (income protection). The waiting time before income protection benefits start being paid. Not a PMI term, but often confused with it.
Diagnostics. Medical tests used to identify a condition; MRI, CT, ultrasound, blood tests, endoscopy.
Direct settlement. When the insurer pays the hospital directly, rather than the policyholder paying and reclaiming.
E
Excess. The amount the policyholder pays per claim before the insurer pays. Higher excesses lower premiums.
Exclusion. Something the policy doesn’t cover. Can be standard (e.g. routine maternity, A&E) or applied based on individual underwriting.
F
FCA. Financial Conduct Authority; the UK regulator for insurance brokers and insurers.
Fee assured. A consultant who has agreed to charge no more than the insurer’s published rate for that procedure. Avoids unexpected out-of-pocket costs.
Free cover limit (group cover). The level of cover available to all employees on a group scheme without individual medical evidence.
Full Medical Underwriting (FMU). An underwriting route where the policyholder discloses their medical history at application. The insurer issues written exclusions; permanent clarity about what’s covered and what isn’t.
G
Group cover. Private medical insurance arranged by an employer for a group of employees. Often comes with Medical History Disregarded underwriting, advantageous for employees with complex histories.
H
Hospital list. The list of private hospitals the insurer will pay for. Lists vary from regional through to full UK inclusion with premium central London hospitals.
I
Inpatient. Treatment requiring an overnight stay or admission to hospital.
Insurance Premium Tax (IPT). A UK tax applied to most insurance premiums, including PMI.
International cover. Cover that pays for treatment outside the UK; important for expats, frequent travellers and dual residents.
M
Medical History Disregarded (MHD). An underwriting basis (usually only on group cover) where the insurer ignores pre-existing conditions at the start of cover. Chronic-condition exclusions still apply.
Moratorium. An underwriting route where pre-existing conditions in the last five years are automatically excluded for the first two years of cover. Exclusions can lift after symptom-free periods.
N
NCD (No Claims Discount). A discount on premium for claim-free years. Builds up over time, capped at a few levels.
NICE. National Institute for Health and Care Excellence; the body that evaluates whether drugs and treatments are clinically and cost-effective for NHS use.
O
Outpatient. Treatment that doesn’t require an overnight hospital stay; consultations, scans, minor procedures.
Out-of-pocket. Costs the policyholder pays themselves, not reimbursed by the policy.
P
Pre-existing condition. Any condition the policyholder has had symptoms of, treatment for, or medical advice on before the policy started. Usually excluded.
Pre-authorisation. See “Authorisation”.
Premium. The price paid for the policy, usually monthly or annually.
R
Recognised consultant. A consultant approved by the insurer to provide treatment under the policy.
Renewal. The annual point at which the policy is reviewed and re-priced.
S
Self-pay. Paying for private treatment directly, without using insurance.
Sum assured (life and critical illness). The lump sum payable on a successful claim. Not a PMI term but often confused with it.
T
Tier. A named cover level offered by an insurer (e.g. Comprehensive, Standard, Essentials).
U
Underwriting. The process of assessing medical history at application and determining what the policy will cover.
V
Virtual GP. A digital GP service included on most modern PMI policies, providing remote appointments by video, phone or app.
W
Waiting period. A period after the policy starts during which certain claims aren’t yet payable; common on moratorium underwriting and on some maternity benefits.
Question we’ve missed? Call 0800 131 0400 or email info@insuredhealth.co.uk and we’ll add it.
