Is Private Medical Insurance Worth It? Part Two

One Fool goes undercover to test the knowledge and competitiveness of a private medical insurance broker.

The Fools at TMF HQ who are concerned about unimportant things, such as generating revenue to pay my salary, asked me whether Preferred Medical, a private medical insurance broker, was a suitable partner for The Fool. This means they wanted to know if it was a quality provider that would do right by Foolish readers.

I answered that there were four things we needed to investigate:

What is the claims ratio for private medical insurance?
Is it independent?
How good is its advice?
Is it competitive?

The 'we' quickly turned to 'I', me being the financial commentator, so I put on my detective's cap.

1. What is the claims ratio for private medical insurance?

I looked at this question in part one: Private Medical Insurance: Is It Worth It? As you'll read there, the answer was encouraging.

2. Is it independent?

In theory, it shouldn't matter if a broker is independent or not, so long as it's good value and gives the best advice. However, in order to consistently give good value and advice, it's much easier if you're independent. Preferred Medical is independent and uses a surprisingly large number of insurers. In all it has 32, from BUPA to Standard Life.

(I've now called Preferred Medical a 'broker' for the second time, but technically it's an 'intermediary', not a broker, but the distinction isn't important. It's independent; that's what matters. And 'broker' rolls off the tongue better, so I'm sticking to that.)

3. How good is its advice?

I knew nothing about the quality of Preferred Medical's advice, so I called it up for a quote. Just like almost all insurances, there are no standard policies, so the rep, Sarah, was obliged to ask questions that would enable her to determine the level of cover that I needed or wanted.

There was a tricky moment when she asked me what my job was. 'Erm, er, I'm a, er...landscape gardener.' Fool writer Alison Hunt (TMFAlly), sitting opposite, gave me a quizzical look. I shrugged and carried on.

Sarah then asked me about my medical history. I made up a couple of conditions to make her life difficult. This is a good test of the broker's advice; insurers exclude cover for pre-existing medical conditions, and the small print often contains other differences, so all of this needs to be explained. Furthermore, the policy that is most suitable changes depending on your medical history.

Sarah passed my test with a smile. The advice, to the best of my knowledge (which is pretty good for a layperson to medical insurance), was spot on.

4. Is it competitive?

I had pretended to want more than one quote, so that I could compare several prices elsewhere. When Sarah had given me the details, I went to the websites of the insurers she had suggested and got quotes directly through them. The good news is that Preferred Medical's quote was the same or lower on every occasion.

I compared Preferred Medical's quotes with another broker's, and it won that one too. So Preferred Medical passed all four tests. On this basis, I'd be happy to use these guys myself, but it can't hurt to get more opinions! If you have any tips on private medical insurance, or on Preferred Medical in particular, help out other Fools by posting a message on our General Insurance board.

Since going undercover I've been reminded gently by Sarah that I haven't made a decision...I think I should probably should let her know who I am now!

> Get a private medical insurance quote from Preferred Medical.
> Read part one: Private Medical Insurance: Is It Worth It?