TL;DR
As an FCA-authorised expert with over 900,000 policies arranged, WeCovr understands the unique pressures facing UK company directors. This guide explores whether personal or corporate private medical insurance offers the best value, helping you optimise your health cover as a crucial part of your executive benefits package. How directors can optimise their health cover as part of executive benefits For a company director, your health isn't just personal; it's a critical business asset.
Key takeaways
- Fast access to specialists and consultants.
- Diagnostic tests like MRI scans, CT scans, and blood tests.
- Private hospital stays, including your own room.
- Surgical procedures.
- Cancer treatment, often with access to drugs not yet available on the NHS.
As an FCA-authorised expert with over 900,000 policies arranged, WeCovr understands the unique pressures facing UK company directors. This guide explores whether personal or corporate private medical insurance offers the best value, helping you optimise your health cover as a crucial part of your executive benefits package.
How directors can optimise their health cover as part of executive benefits
For a company director, your health isn't just personal; it's a critical business asset. An unexpected illness or injury can disrupt operations, impact decision-making, and affect the bottom line. With NHS waiting lists reaching record highs—the elective care waiting list in England stood at around 7.54 million in early 2024—private medical insurance (PMI) has become less of a luxury and more of a strategic necessity.
The central question for directors is how to structure this cover. Should you buy a personal policy with your own money, or have the company provide it as a corporate benefit? The answer has significant implications for cost, coverage, and tax. This guide will walk you through every consideration, empowering you to make the most informed decision for your health and your business.
Understanding Private Medical Insurance (PMI) in the UK
Before we compare personal and corporate schemes, it’s vital to be clear on what private medical insurance is and, crucially, what it is not.
PMI is an insurance policy that covers the cost of private healthcare for acute conditions that arise after your policy begins. An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery.
What does PMI typically cover?
- Fast access to specialists and consultants.
- Diagnostic tests like MRI scans, CT scans, and blood tests.
- Private hospital stays, including your own room.
- Surgical procedures.
- Cancer treatment, often with access to drugs not yet available on the NHS.
- Outpatient therapies like physiotherapy.
- Mental health support.
The Critical Exclusion: Chronic and Pre-existing Conditions
This is the most important concept to understand about UK PMI. Standard policies do not cover chronic or pre-existing conditions.
- A pre-existing condition is any illness, disease, or injury you have had symptoms of, or received advice or treatment for, in the years before your policy starts (typically the last 5 years).
- A chronic condition is an illness that cannot be cured and requires ongoing, long-term management, such as diabetes, asthma, or high blood pressure.
PMI is designed to get you diagnosed and treated for new, curable conditions, helping you return to health and work quickly. It is not a substitute for the NHS, which provides excellent care for accidents, emergencies, and the management of chronic diseases.
The Director's Dilemma: Personal vs. Corporate PMI
As a company director, you have two primary routes to securing private health cover. Each has distinct advantages and disadvantages related to funding, tax, and the level of cover you can obtain.
What is a Personal PMI Policy?
A personal policy is one you research and purchase as an individual. You pay the monthly or annual premiums from your post-tax income. You have complete control over the insurer, the level of cover, and any optional extras.
What is a Corporate PMI Scheme?
A corporate or business PMI scheme is purchased by your limited company. The company pays the premiums directly to the insurer. This can be for a single director (a 'group of one') or for multiple employees. These schemes are treated as a business expense and have specific tax implications for both the company and the director.
At a Glance: Personal vs. Corporate PMI for Directors
This table breaks down the key differences to help you see the pros and cons of each approach more clearly.
| Feature | Personal PMI Policy | Corporate PMI Scheme |
|---|---|---|
| Payment Source | Paid by the director from post-tax personal income. | Paid by the company as a business expense. |
| Company Tax | No impact. | Premiums are a tax-deductible expense, reducing the company's Corporation Tax bill. |
| Personal Tax | No tax implications. | Treated as a Benefit-in-Kind (BiK). The director must pay income tax on the value of the premium. |
| Cost | Often more expensive on a per-person basis. | Generally cheaper per person due to group-risk pricing, even for a "group of one". |
| Underwriting | Usually Moratorium or Full Medical Underwriting. Pre-existing conditions are excluded. | 'Medical History Disregarded' (MHD) often available, which can cover pre-existing conditions. A major advantage. |
| Control | Full control over provider, policy level, and extras. | Policy is chosen and controlled by the company. Less individual flexibility. |
| Continuity | The policy stays with you regardless of your employment status. | Cover ceases if you leave the company, though you can often continue it on a personal basis. |
As you can see, while a corporate scheme introduces a personal tax liability, its advantages in terms of company tax relief, lower premiums, and superior underwriting options often make it the most efficient choice for company directors.
Deep Dive: Tax Implications for Company Directors
Understanding the tax treatment of PMI is fundamental to making the right decision. Let's break it down with simple examples.
For the Company: A Tax-Deductible Expense
When your limited company pays for your health insurance, the premiums are considered an allowable business expense. This means you can deduct the full cost from your company's profit before calculating your Corporation Tax liability.
- Main Corporation Tax Rate (as of 2024/25): 25%
Example: Your company, a profitable consultancy, decides to pay for a PMI policy for you, the director. The annual premium is £1,500. (illustrative estimate)
- Illustrative estimate: The company can deduct this £1,500 from its profits.
- Illustrative estimate: This reduces the company's Corporation Tax bill by 25% of £1,500 = £375.
- Illustrative estimate: The net cost of the policy to the business is effectively £1,500 - £375 = £1,125.
For the Director: A Benefit-in-Kind (BiK)
Because the company is paying for a personal benefit, HMRC treats the insurance premium as a 'Benefit-in-Kind'. This is essentially considered extra income, and you must pay income tax on it.
- The company must report this benefit to HMRC on a P11D form.
- The value of the benefit is the total premium the company paid for you in that tax year.
- You will pay income tax on this value at your marginal rate (20%, 40%, or 45%).
Example (continued): The company pays a £1,500 premium for your health cover. You are a higher-rate taxpayer (40%). (illustrative estimate)
- Illustrative estimate: The P11D value of the benefit is £1,500.
- Illustrative estimate: Your personal income tax liability on this benefit is 40% of £1,500 = £600.
- This is typically collected by HMRC adjusting your tax code, meaning you pay it gradually over the year.
Is It Still Worth It?
Let's combine the two examples.
- Illustrative estimate: Company saves £375 in Corporation Tax.
- Illustrative estimate: Director pays £600 in Income Tax.
The total "cost" from a tax perspective is a net outflow of £225 (£600 - £375). However, the company has paid the full £1,500 premium. If the director had bought the same policy personally, they would have had to earn approximately £2,500 before tax to have £1,500 left over to pay for it (assuming a 40% tax rate). (illustrative estimate)
Therefore, despite the BiK tax, arranging PMI through the company is almost always more tax-efficient than a director paying for it from their personal, post-tax funds. A specialist PMI broker like WeCovr can help you model these costs for your specific circumstances.
Why 'Medical History Disregarded' Underwriting is a Game-Changer
Perhaps the single greatest advantage of a corporate PMI scheme is access to 'Medical History Disregarded' (MHD) underwriting.
To understand why this is so valuable, let's look at the standard types of underwriting for personal policies:
-
Moratorium (Most Common): The insurer will not cover any conditions you've had symptoms of or treatment for in the 5 years before the policy starts. However, if you go for a set period (usually 2 years) without any symptoms, advice, or treatment for that condition after your policy begins, it may become eligible for cover. It’s simple and requires no medical forms upfront, but can create uncertainty at the point of claim.
-
Full Medical Underwriting (FMU): You complete a detailed health questionnaire. The insurer reviews your medical history and explicitly lists any conditions that will be excluded from cover from day one. It provides clarity but means past health issues are permanently excluded.
Corporate policies, especially for groups of 2-3 or more (and sometimes even for one director), can offer:
- Medical History Disregarded (MHD): This is the gold standard. With MHD, the insurer agrees to cover eligible acute conditions, regardless of your previous medical history. If you have a pre-existing knee problem, for example, and it flares up requiring surgery (an acute event), an MHD policy would cover it. A personal moratorium or FMU policy would not.
Important Caveat: MHD does not mean chronic conditions are covered. It simply removes the "pre-existing" exclusion for acute conditions or acute flare-ups of a pre-existing condition. The ongoing, day-to-day management of a chronic illness like diabetes remains outside the scope of cover.
For directors who may have accrued some medical history over the years, the ability to secure MHD cover through a company scheme is a powerful incentive.
Choosing the Right Scheme: Key Considerations for Directors
Once you've decided a corporate scheme is the way forward, the next step is designing the right policy. A good broker will guide you through these choices.
-
Level of Cover: Policies are typically tiered.
- Basic: Covers essential in-patient and day-patient treatment.
- Mid-Range: Adds a level of outpatient cover (e.g., up to £1,000 for specialist consultations and tests).
- Comprehensive: Offers full outpatient cover, and often includes more extensive mental health, dental, and optical benefits.
-
Excess: This is the amount you agree to pay towards a claim. For example, with a £250 excess, you pay the first £250 of a claim, and the insurer pays the rest. A higher excess will significantly lower your premium.
-
Hospital List: Insurers offer different lists of approved hospitals. A more comprehensive (and expensive) list will include prime central London hospitals. Check that your local private hospital is on your chosen list.
-
The '6-Week Wait' Option: This is a popular way to reduce costs. The policy will only pay for private treatment if the NHS waiting list for that procedure is longer than six weeks. If you can be seen on the NHS within six weeks, you would use the NHS.
-
Adding Family Members: Most corporate schemes allow you to add your spouse, partner, and children. The premium for them is also a tax-deductible expense for the company but will be added to your P11D Benefit-in-Kind calculation, increasing your personal tax liability.
Beyond Treatment: The Rise of Wellness and Digital Health
Modern private medical insurance UK providers offer far more than just hospital cover. The focus has shifted towards proactive health and wellbeing, providing tools to help you stay healthy in the first place. This is particularly valuable for busy directors juggling immense responsibilities.
Look for policies that include:
- 24/7 Digital GP: Video or phone consultations with a GP at a time that suits you, often with same-day appointments. This is invaluable for getting quick advice and prescriptions without disrupting your workday.
- Mental Health Support: Access to counselling, therapy sessions (e.g., CBT), and support phone lines without needing a GP referral. Given that work-related stress, depression or anxiety accounted for 17.1 million working days lost in the UK in 2022/23 (HSE), this is a vital benefit.
- Physiotherapy Access: Self-referral services for musculoskeletal issues, helping you deal with back or neck pain before it becomes a major problem.
- Wellness Apps and Discounts: Many insurers offer discounts on gym memberships, fitness trackers, and access to wellness apps.
As a WeCovr client, you also receive complimentary access to our AI-powered nutrition app, CalorieHero, helping you manage your diet and stay on top of your health goals. We believe in providing holistic support that goes beyond just an insurance policy.
A Director's Guide to Staying Healthy
- Prioritise Sleep: Aim for 7-8 hours. Lack of sleep impairs cognitive function, decision-making, and emotional regulation.
- Schedule Movement: Block out time in your diary for exercise, even if it's just a 30-minute brisk walk. It's a powerful stress-reducer.
- Mindful Nutrition: Use tools like CalorieHero to understand your eating habits. A balanced diet fuels brainpower and energy levels.
- Strategic Downtime: Disconnect completely from work for set periods. Your brain needs time to rest and recharge to maintain peak performance.
How a Specialist PMI Broker Like WeCovr Adds Value
The UK private health cover market is complex, with dozens of providers and hundreds of policy variations. Trying to navigate this alone is time-consuming and can lead to you buying an unsuitable or overpriced policy.
This is where an independent broker excels.
- Expert, Impartial Advice: As an FCA-authorised broker, WeCovr works for you, not the insurance companies. Our goal is to find the best possible fit for your specific needs as a director.
- Whole-of-Market Comparison: We compare policies from all the UK's leading insurers—including Aviva, Bupa, AXA Health, and Vitality—to find the optimal balance of price and benefits.
- No Cost to You: Our service is free. We are paid a commission by the insurer you choose, but this does not affect the price you pay.
- Hassle-Free Process: We handle the paperwork and the negotiations, saving you valuable time.
- Ongoing Support: We are here to help you at renewal or if you need to make a claim. Our high customer satisfaction ratings reflect our commitment to long-term client relationships.
- Exclusive Benefits: When you arrange a PMI or Life Insurance policy through WeCovr, we can also offer you discounts on other essential business and personal cover.
Is private health insurance a taxable benefit for a company director in the UK?
Can a limited company pay for a director's personal health insurance?
What is the difference between an acute and a chronic condition for PMI?
Can I add my family to my company's health insurance policy?
Take the Next Step
For a company director, choosing the right health insurance is a strategic business decision. It protects your most valuable asset—your health—while providing significant advantages for your company. While the tax implications can seem complex, the benefits of a corporate scheme, particularly access to 'Medical History Disregarded' underwriting, often make it the superior choice.
Contact WeCovr today for a free, no-obligation quote. Our expert advisors will review your unique situation, compare the market for you, and build a tailored recommendation that optimises your health cover and provides peace of mind.
Sources
- NHS England: Waiting times and referral-to-treatment statistics.
- Office for National Statistics (ONS): Health, mortality, and workforce data.
- NICE: Clinical guidance and technology appraisals.
- Care Quality Commission (CQC): Provider quality and inspection reports.
- UK Health Security Agency (UKHSA): Public health surveillance reports.
- Association of British Insurers (ABI): Health and protection market publications.
