Insuring yourself for medical issues

By | 3rd July 2017


Many people forget to look at taking out insurance on themselves, instead assuming that they may be covered by state benefits.

However, as I mentioned previously, an increasingly aged population mean that benefits are likely to reduce over time.

Even at present levels, are the amounts paid and service levels sufficient for your needs?

It is most likely that additional coverage will need to be included in your monthly budget.

Looking at the data for 2016, it would seem that while the average family spends over £70 a week on transport, they only spend £7 a week on health at the moment.

There are three areas where you may want to consider insurance: health, disability and critical illness.

While the NHS has done good things in the past, the system does appear to have issues now.

For example, seeing a doctor locally takes 2-3 weeks to get an appointment (for a 5 minute appointment, Monday – Friday.)

A referral from the doctor to see a specialist might take 2-3 months (However, should they lose the referral in the system, then you might find that you go to the back of the queue unless you make a formal complaint, and endure being shouted at!)

Even going to that ‘free’ hospital appointment will cost you for transport – in Surrey you could easily be looking at £70 for a return taxi. If you were to get a lift from someone, you would still have to pay for parking at the hospital.

Having an emergency fund that covers medical issues means that you may be able to see a private GP within a couple of hours, and in the evenings or on a Saturday.

You’ll find that the appointment is for 20 minutes rather than 5 with the NHS. You will need £100 from your emergency fund to pay for this though.

A GP referral done privately could see you with the specialist in a week or so, and perhaps even operated on within a couple of weeks after that – covered by private medical insurance.

So for heath, you may want to look at including an element of your emergency fund combined with private medical insurance.

You can usually also include dental coverage as an option for the insurance.

If you were unable to work, how would you cope until retirement age?

Disability insurance would pay out a monthly income to you, perhaps up to 75% or so of your usual earnings.

When you look at the level of state benefits, it’s likely that this insurance will be most beneficial.

Critical Illness
Should you be diagnosed with a serious illness, then this policy would pay out a lump sum to deal with immediate issues.

As with disability insurance, having cover that removes money worries at a difficult time is to be recommended.

These three areas could add up to a significant amount in your monthly budget, perhaps say £150-£200 a month in total depending on your age and health.

If everything goes well then you may never need to use them, but it is when things go wrong that you will be very grateful for the cover.

If you are running your own business, you are the most important asset within it – so it is only right that you allocate funds to cover yourself.

If you are looking for ways to free up funds for say £150 a month then perhaps:

– Using Netflix or similar instead of satellite TV frees up £90 a month.

– A decent pay as you go smartphone instead of a top of the range contract one frees up £50 a month.

After building up 17 years experience in industry and practice, James started his own business from scratch in 2006. He now helps others to do the same, while minimising both the risks and costs. James is dual qualified in tax and accounts, and has won multiple awards for small business. In 2014 he was invited to Downing Street, as one of the Small Business Saturday 100 winners.

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