25% off? 50% off? 3 months free? These and numerous others are all bandied around on a daily basis in the Private Healthcare industry, but look past the initial headline number and things aren’t always as beneficial as they seem.

An introductory offer currently doing the rounds states ‘25% off your initial premium’, followed by reduced percentages in year two and three. Fantastic you might think, that price fits my budget…in reality you are likely setting yourself up for a sizeable increase in future years and what was once affordable, soon becomes the opposite. With medical inflation always sitting around 10%, plus the usual age related increase, even with no claims you are likely looking at a 15%+ increase in year two, not an amount most customers will come to expect or for that matter accept.

No Claims Discount Scale

The 50% off option sounds even more inviting, right? Wrong. All it refers to is the level of no claims discount an individual policy begins on. All policies start on a high discount level to attract people to buy at a certain price point. A policy will slide up and down that scale each year depending on the claims made. First year increases are still likely to be comfortably in double digits even with no claims made.

Free’ months also come with a sting in the tail, that being renewal terms are in most cases calculated from the 12 month premium, not the amount that was actually paid. So again, you’d be looking at anywhere near an 8% increase for the loss of the 1 month free ‘discount’, 10% medical inflation plus age and any claims loading. Total that up to somewhere in the region of 20%+. If you’ve taken out a policy with a 3 months free introductory offer, then I hope you’re sat down when you receive your renewal terms!

The use of a broker to get the best deal each and every year is of course a given as without one, it comes down to the individual or company secretary to negotiate the final renewal premium. As with any industry or insurance, talking with an experienced individual will always be the advised way to go.

To conclude, a true ‘discount’ is only such when the underlying rate of insurance is reduced, not just an amount knocked off temporarily. If month’s free is how an insurer operates then fine, but ensure you, the client, know exactly what that means not just this year, but when that renewal document hits the doormat a year later. As with any paid for service or product these days, first offers are very rarely the best. Ensure your broker is not only getting you the best deal each year but they also fully explain how any ‘discount’ has been achieved and its impact at future renewals. As the saying goes, ‘the devil is in the detail’.

Our team of healthcare experts are on hand to review existing arrangements or discuss options for well-rounded packages, ensuring a combination of benefits which truly suit companies’ respective needs and budgets. Call Anders Lewis on 0117 456 7418 or email andersl@bruneleb.co.uk