Private Health Insurance for Company Directors and Limited Companies
Compare private health insurance for company directors, their families and growing limited companies, with independent advice tailored to your business and future plans.
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Louis has over 12 years' experience advising company directors and business owners on private medical insurance.
Cover That Fits How Your Company Is Structured
Running a limited company means making decisions about where the business spends its money and which benefits are genuinely worthwhile. Limited company health insurance can be one of them.
For company directors, there are several ways private medical insurance can be arranged. You could pay for an individual policy personally, have an individual policy paid for through the business, or set up a business health insurance scheme covering directors and potentially employees.
The right route depends on who needs cover now, how the company is structured and what you may want the policy to do in the future. If you are self-employed but not trading through a limited company, read our guide for self-employed and sole traders instead.
At Elective Health, we provide independent, FCA regulated advice and compare suitable options from leading UK health insurers.
Can a Limited Company Pay for Private Health Insurance?
Yes. A limited company can pay for private health insurance for a director.
What sometimes causes confusion is the assumption that doing so automatically means setting up a group or employee health insurance scheme. It does not.
Depending on the circumstances and insurer, it may be possible to arrange an individual private health insurance policy for a director and have the premium paid directly through the limited company. Alternatively, the company can set up a business health insurance scheme designed to cover a defined group of people.
There are therefore several different ways to approach it, and the most appropriate structure depends on who you want to insure and what you expect the business to need in the future.
Company funded private medical insurance can have tax implications, including Benefit in Kind considerations. Elective Health advises on the insurance arrangements. For individual tax treatment and accounting advice, please speak to your accountant or tax adviser.
Three Ways a Company Director Can Arrange Private Health Insurance
It helps to separate the three main possibilities.
Individual Cover Paid Personally
You take out an individual private health insurance policy and pay the premium from your personal bank account. The policy belongs to you as an individual and is not funded by the business.
Individual Cover Paid Through the Company
An individual private medical insurance policy can, in appropriate circumstances, be arranged for the director while the premium is paid through the company's bank account.
This can be particularly relevant where cover is only required for a small number of people, such as:
- One director
- One director and their family
- Two directors individually
- Two directors and their respective families
The insurer can usually provide appropriate policy and payment documentation for the company accounts, with relevant information available for accounting and P11D purposes where applicable.
This gives a small limited company a straightforward way to fund private health insurance without setting up a wider employee scheme. There is one important limitation to understand first, which is covered below.
Business Health Insurance
A business health insurance scheme is designed around a group of people, rather than an individual policy that happens to be paid for by the company.
This becomes relevant where the business wants to cover employees, or intends to offer private medical insurance as an employee benefit as the company grows.
Individual Cover or a Business Health Insurance Scheme?
Neither option is automatically better.
A single director, cover for yourself only
An individual arrangement paid through the business may be appropriate.
Two directors, cover for yourselves and your families
Individual arrangements for each director may be worth considering.
You have employees, plan to recruit, or want cover company-wide
A business scheme is likely to be the better structure.
Uncertain which of these three routes is the most appropriate for your company? We can review your options with you.
What Happens if My Company Grows?
This is worth thinking about at the beginning rather than waiting until the company has already expanded.
An individual policy remains an individual arrangement, even if the limited company is paying the premium. If you later employ more people and decide you want to provide private health insurance to your team, you cannot simply bolt those employees onto a director's individual policy.
Instead, the company would normally need to set up a separate business health insurance scheme. When making this transition, a director may be able to transfer their existing underwriting across to the new business scheme, rather than starting from scratch, before adding new members to it. Alternatively, they could start a fresh scheme if that is preferred. This is subject to the medical declaration, the insurer's terms and eligibility at the time.
An individual policy paid through the company can therefore make sense where the intention is to cover one or two directors and their families. However, if you already have employees, or expect the company to grow and want limited company health insurance to form part of your employee benefits package, it may be worth considering a business scheme from the outset.
Can I Include My Partner and Children?
Yes. Family members can be included on business health insurance, allowing you to cover your spouse or partner and children alongside your business cover.
For example, a company with two directors might arrange individual cover for each director and include their respective families, with the premiums paid through the business where appropriate.
Company funded dependant cover can have tax implications, so your accountant or tax adviser should advise on the tax treatment. Elective Health can explain the insurance options and how the different arrangements work.
What Can Private Health Insurance Cover?
The exact benefits depend on the insurer and policy selected, but private medical insurance can provide cover for:
Policies that look very similar on a quotation can provide significantly different levels of cover. That is why we look beyond the monthly premium. To understand how these benefits work in more detail, read our comprehensive guide to private health insurance.
Why Private Health Insurance Can Matter to a Company Director
For many company directors, being able to work is closely connected with the performance of the business. You may be responsible for clients, staff, sales, operations or decisions that cannot easily be handed to somebody else.
An extended period away from the business can therefore have consequences beyond your own health.
Private health insurance is not designed to replace your income while you cannot work. Its purpose is to provide access to private diagnosis and treatment in line with the policy.
For directors who also want financial protection if illness or injury prevents them from working, income protection may be worth considering separately.
Can I Provide Private Health Insurance for My Employees?
Yes, subject to insurer and scheme requirements.
A business health insurance arrangement could potentially cover:
- Directors
- Directors and employees
- Defined groups of employees
- A wider workforce
You do not need a company with hundreds of employees before business health insurance becomes relevant. Smaller companies can also have options, although minimum numbers, underwriting and eligibility requirements vary between insurers.
If your intention is to provide health insurance to employees, we would generally look at the business scheme options rather than simply arranging individual company director health insurance policies.
Whether you need cover for yourself, your family, or your entire team, we can compare the right structures for you.
What if I Already Have Private Health Insurance?
If you already have private medical insurance, do not cancel it simply because you are considering having your company fund your cover, or because another insurer appears to cost less.
Your existing underwriting and medical history can be important. Moving from one arrangement to another without understanding the underwriting implications could affect how existing or previous medical conditions are treated.
Subject to the medical declaration and the insurer's terms, we may be able to move your existing underwriting onto another scheme rather than necessarily starting again from scratch.
We can review your existing policy, establish how it is currently underwritten and compare it with the alternatives before you decide whether changing anything makes sense. Read our guide to switching health insurance.
How Does Underwriting Work?
Underwriting determines how an insurer treats your previous and existing medical history.
Depending on whether the cover is individual or arranged as a business scheme, and the size and circumstances of that scheme, different underwriting options may be available.
Full Medical Underwriting
You provide medical information when applying and the insurer establishes the terms of cover from the outset.
Moratorium Underwriting
You do not generally complete a full medical declaration when applying. Previous conditions are instead dealt with according to the insurer's moratorium terms.
Continued Underwriting
When moving from existing private medical insurance, it may sometimes be possible to continue an existing underwriting basis, subject to the new insurer's terms and acceptance.
Medical History Disregarded
For qualifying business schemes, Medical History Disregarded underwriting may be available. MHD works differently from standard individual underwriting and can be particularly valuable in certain group situations. Eligibility and terms vary between insurers.
Not sure which underwriting basis or structure suits your company? We can talk it through with no obligation.
Three Things People Overlook
Two quotations can look almost identical until you examine how the cover actually works.
Hospital Lists and Consultant Choice
The insurer you choose can affect where you receive treatment and which consultants you can see. Some policies provide access according to a defined hospital list. Others offer guided consultant arrangements, where the insurer provides a selection of appropriate specialists rather than giving completely open consultant choice. Guided options can help reduce the premium, but they also reduce your freedom to choose a particular consultant. If there is a specific private hospital or specialist you would want to use, that should be considered before choosing the policy.
Outpatient Cover
Outpatient cover is one of the areas where policies can differ significantly. Some provide comprehensive outpatient benefits while others place a monetary limit on outpatient treatment. A limited outpatient allowance can reduce the premium, but consultations, blood tests and diagnostic investigations can use that allowance quickly where a condition is difficult to diagnose. This is why comparing two policies purely on price can be misleading. We will explain the differences so you know what you are actually buying.
The Excess
Choosing an excess is another way of influencing the premium. Depending on the insurer and policy, different excess levels may be available. It is also important to understand how the excess is applied. For example, an excess may operate once per person per policy year with some arrangements, while other policy structures can work differently. We look at the excess alongside the overall cover, rather than simply selecting the highest excess to reduce the premium.
How Much Does Private Health Insurance for a Company Director Cost?
There is not one standard price for director health insurance. Premiums can be affected by factors including:
A one director company requiring individual cover will have very different requirements from a growing limited company looking to insure directors and employees.
Rather than giving you a headline figure that may have little relevance to your circumstances, we can compare appropriate options based on what you actually need.
Can I Reduce the Cost of the Cover?
Potentially. Depending on the insurer, ways of managing the premium can include:
- Increasing the excess
- Adjusting outpatient cover
- Changing the hospital list
- Selecting a guided consultant option
- Reviewing optional benefits
- Reviewing the structure of the cover
Reducing benefits simply to achieve the lowest monthly premium is not always the best approach.
One director may want comprehensive outpatient diagnostics but be comfortable with a higher excess. Another may prioritise access to a particular hospital or consultant.
Understanding where you are prepared to compromise is more useful than simply finding the lowest number on a quotation.
Company Health Insurance and Benefit in Kind
Private medical insurance paid for by a limited company will generally have tax implications for the director or employee receiving the benefit.
Employer funded private medical insurance is normally treated as a Benefit in Kind and there can also be reporting requirements.
Insurers can provide policy and premium documentation to support the company's accounting requirements, including relevant information for P11D purposes where applicable.
Tax treatment can depend on individual circumstances.
Elective Health advises on private medical insurance, not individual taxation. Your accountant or tax adviser should confirm the tax and accounting treatment applicable to you and your company.
Read more: Business Health Insurance
Private Health Insurance and Protection Cover for Directors
These arrangements serve different purposes.
Private Health Insurance
Provides access to private medical diagnosis and treatment in line with the policy.
Income Protection
Designed to provide an income following qualifying illness or injury that prevents you from working.
Business Protection
Covers arrangements such as relevant life cover and critical illness style protection that can be structured and paid for through the business.
Having private medical insurance does not mean your income or the business is protected if you cannot work. Protection cover can also be arranged through the company to manage these risks.
The intended beneficiary depends on the arrangement. For example, relevant life insurance is typically written so the benefit goes to the director's family or chosen beneficiaries. Conversely, key person style arrangements can be set up so the benefit is paid directly to the business. This can help the company manage the financial impact of a key director being unable to work for a period, allowing the business to maintain ongoing commitments or fund interim support during the shortfall.
For a director whose personal income and company are heavily dependent on their ability to work, it can be worth considering these risks separately alongside income protection and critical illness cover.
The structure and tax treatment of these arrangements should be confirmed with your accountant or tax adviser.
Why Use an Independent Health Insurance Adviser?
Private medical insurance policies can look remarkably similar until you examine the detail. Two quotations with similar premiums can have very different:
- Outpatient limits
- Hospital access
- Consultant options
- Excess structures
- Underwriting
- Additional benefits
- Switching implications
Elective Health provides independent, FCA regulated advice and can compare appropriate options from leading UK health insurers. We help you understand what you are paying for, what is not covered and how the policy will actually work when you need it.
For company directors, we can also look at whether an individual arrangement paid through the business or a wider business health insurance scheme is more appropriate for what you are trying to achieve.
Have your company structure, hospital requirements and existing cover reviewed by an independent adviser with no obligation.
Frequently Asked Questions
Straight answers to the questions company directors ask us most.
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Talk to Elective Health
Whether you are the only director of your limited company, two directors looking to cover your families, or a growing business considering private health insurance for employees, the starting point is understanding which structure fits what you are trying to achieve.
We can review your circumstances, existing cover, underwriting, hospital requirements, outpatient benefits and budget before comparing appropriate options from leading UK insurers.
Independent advice. Clear explanations. Cover built around you and your business.