Private medical insurance (PMI) pays for you to have private treatment if you have an acute condition, such as appendicitis, or an acute episode of a chronic condition, such as asthma or diabetes.

PMI will not usually pay for the ongoing treatment of chronic conditions, nor will it usually pay for GP visits, long-term care, dentistry, or accident and emergency treatment.

The cost of the insurance is high, at an average of about £1,000 per year. What you want included in your policy will affect what you pay. If you want red-carpet treatment throughout, including regular health-screening and travel health insurance, you will pay more. If you are willing to pay, for example, for all your own out-patient care, or rely on the NHS, then you can cut your insurance costs.

Usually the single biggest influence on cost is where you are treated. Your local private facilities are likely to cost a lot less than somewhere in central London, for example. The application form for PMI will give you a choice between full medical underwriting and moratorium underwriting.

The former means telling your insurer your full medical history and, perhaps, having certain conditions excluded in the future. A moratorium application means that cover is provided immediately without the need to submit medical information and so no pre-existing condition would need to be declared. They usually remain excluded until you have been free of treatment for two years.

If you go for moratorium underwriting, check with your GP that you do not have any pre-existing conditions.

Whatever policy you take out, make sure you are covered before you start incurring costs. Insurers generally offer helplines so that it is easy to check this.