Costs of individual policies have risen by 54%

According to Datatmonitor, the cost of buying an individual policy has risen by 54% in the last five years.

This has led to a 12% fall in the number of people with individual policies between 1997 and 2002.

But overall sales of healthy insurance have risen, as more employers were offering policies to their staff.

Keeping costs down

The cost of an average individual premium is more than twice as expensive as the average group premium - and rose from �789 in 1997 to �1,218 in 2002.

This meant there were 257,900 fewer people covered by an individual policy in 2002 than in 1997 - an fall of 2.5% a year since 1997.

It's actually good for business if you can help staff get well John Dubois, PPP spokesman

Bupa, the UK's largest private medical insurer, said it was launching more innovative products to try and keep costs down - and had introduced individual pricing.

For example, it had recently launched a policy, called "Heartbeat: Heart and cancer" that covered only those conditions.

A spokesman said this deal would cost a 30 year old around �18 a month.

A more comprehensive package, however, would cost about �50 a month.

Employer schemes

But the overall number of people with private health cover has risen.

This is because more employers were membership of a work-based schemes, as part of a recruitment package.

This meant the number of people covered by some form of private medical insurance rose by 604,000 between 1997 and 2002, leaving 6.7 million people covered by the policies.

John Dubois, a spokesman for PPP, the UK's second largest private medical insurer, said more businesses were recognising the benefits of providing private healthcare as an option to staff.

They were also recognising that it was an "absence management tool".

"It's actually good for business if you can help staff get well," he said.