Why private health insurance is still popular

During times of economic turmoil, insurance policies are usually among the first cost-cutting casualties. Unfortunately, the true value of any policy is often not revealed until it is needed, whereas the regular cost of premiums is likely to stretch an already tight budget.

Research from Sainsbury's Finance reveals half a million Brits have cut back on home contents cover in the past 12 months, leaving themselves with no protection in the event their property is stolen, destroyed or damaged.

However, private medical insurance (PMI) seems to be faring surprisingly well during the economic downturn. Bupa recently released results that show customer numbers were up 2% by the end of 2008, and figures from Simplyhealth reveal sales of HSA's employee paid Health Cash Plan were up 25% in the final quarter of last year.

When cutting back costs more

The appeal of PMI
Private medical insurance (or private health insurance) is designed to meet the cost of non-NHS medical treatment in the event you experience health problems.

Holding a PMI policy means you may have a say in which hospital you are treated at and which specialists you see. You're also likely to have more comfortable accommodation if you are treated privately, probably in your own en-suite room.

It seems the key appeal of PMI is that it allows individuals swift access to health care when they need it. Although the NHS says its '18 weeks' waiting time target has now been met (whereby patients referred from a GP for further treatment can expect it to commence within that timeframe), research from Bupa shows more than 80% of people feel this is still too long to wait for medical care.

The insurer's survey found that 49% of respondents believed hospital waiting times should be less than one month. Meanwhile, 69% of people were concerned their health could deteriorate further if they went without medical attention for as long as 18 weeks.