Standard Life Healthcare, the new name for Prime Health, is offering a new PMI product that slashes average premiums by up to 80%.

Choices is said to provide a cost-effective route to private medical treatment by including a high excess for people who opt to pay for their own operations.

The product was designed in response to the growing demand for self-paid operations – more than 160,000 were purchased last year. Commission for brokers is 30% on new sales and 5% for renewal business.

Mike Hall, Standard Life Healthcare managing director, said: "Choices is a new approach to PMI. For the first time, customers can purchase a product that gives them control over the funding of private healthcare but at the same time provides the safety net of insurance."

Choices has three elements of cover.

There is a high excess option for people who choose to pay for their own operations set at three stages, £1,000, £2,500 and £5,000, with the balance being covered by insurance if the cost of treatment is higher than the selected excess. Premiums for a 40-year-old man taking out the £5,000 excess option would average £9.35 per month.

A treatment information service also forms part of the policy and helps people organise their own private treatment if this falls below the price of their excess level.

An investment option or personal health fund provided by the medical insurer's parent company Standard Life completes the package.

Research by Audience Selection published in February shows 60% of people would contribute to an investment plan to pay for private treatment if it was supported by a PMI policy for larger claims.

Standard Life Healthcare, formerly Prime Health, has built up a customer base of 250,000 policyholders in its 12-year existence.