Many directors of small companies understand the benefit private medical insurance can bring. It helps their health and their business by ensuring they get treated quickly.
While buying a personal policy can be one way of addressing this, the advantages of taking out company cover should not be ignored, say health insurer Standard Life
The company quotes a typical monthly cost for two directors taking out personal cover for themselves and their families:
Director 1 aged 50, buys family cover = £269.77
Director 2 aged 40, buys family cover = £204.14
This would cost the company £5686.92 for the year.
Premiums based on Standard Life Healthcare individual Primecare, Countrywide hospital list, monthly premiums, 25% no-claims discount, no excess. Figures are for illustration only.
You would probably assume that extending cover to all their staff would be an employee benefit a small company like this couldn’t afford. But take a look at the figures and you might be surprised.
By adding the other four employees and creating a group scheme, the monthly premiums compare favourably:
Director 1 aged 50, family cover = £146.38
Director 2 aged 40, family cover = £111.77
Employee 1 aged 40, single cover = £44.71
Employee 2 aged 30, single cover = £34.03
Employee 3 aged 25, single cover = £30.35
Employee 4 age 22, single cover = £30.35
This would cost the company £4771.08 for the year.
Premiums based on Standard Life Healthcare Company Primecare, Countrywide hospital list, monthly premiums, no Excess, moratorium, +6 member rates. Rates as at November 2006. Figures are for illustration only.
This would save the directors an amazing £915.84 p.a., which clearly makes far better financial sense. And, looking after the well-being of their staff may not only help to get them back to work quickly should they fall ill, but it’s an attractive employee benefit too - which could help them attract and retain the best staff.
And, what the insurer forgot to point out is that the individual policies would have to be paid out of net personal income, while a company bought policy is a business expense for tax purposes.