Private Medical Insurance for Limited Company Directors
If you run a limited company, you can usually pay for your private medical insurance through the company rather than out of personal post-tax income. For most directors that’s a meaningfully better deal.
Insured Health helps UK directors compare cover and choose between personal and company-paid options. Call 0800 131 0400 or email info@insuredhealth.co.uk.
How company-paid PMI works for directors
The company pays the premium directly to the insurer. The premium is usually an allowable business expense, reducing corporation tax. The cover itself is treated as a benefit-in-kind: the director pays income tax on the cash value of the premium through their P11D, and the company pays Class 1A National Insurance on that value.
For most directors paying corporation tax at the small profits rate or above, the after-tax cost of company-paid PMI is lower than buying the same cover personally, but the exact saving depends on your tax position. Always confirm with your accountant.
When personal PMI still makes sense
Company-paid isn’t always best. You might prefer to pay personally if:
- You take small dividends and a low salary, so the benefit-in-kind is more painful than the corporation tax saving
- Your accountant advises a particular structure for IR35 or other reasons
- You want to insulate your cover from changes in the company’s status
We’ll model both options before you commit.
Single director vs small group scheme
If you have one or two directors and no other employees, an individual policy structured as company-paid is usually the right answer. Once you reach three or more covered people; directors plus key staff, or directors plus their families through the company; a small group scheme often becomes cheaper and offers better underwriting.
A small group scheme can also unlock medical history disregarded underwriting, where pre-existing conditions are covered without needing to be disclosed. That’s a benefit individual policies rarely offer.
What director-level cover often includes
- Comprehensive inpatient and outpatient cover
- Higher hospital list including premium central London hospitals (often optional)
- Cancer cover with access to advanced therapies
- Mental health cover with a higher session limit
- Virtual GP and digital health services
- Optional extras: dental, optical, international cover, travel insurance
Adding family
Directors often want cover for their partner and children too. Two routes:
- Add family to the company policy; paid by the company. The benefit-in-kind value rises accordingly, increasing the director’s personal tax bill but usually still cost-effective.
- Separate family policy; paid personally. Sometimes simpler and cleaner from a tax-planning perspective.
We’ll quote both so you can see the cost gap and decide.
Frequently asked questions
Is PMI a tax-efficient benefit for directors? For most limited company directors, yes; the corporation tax relief usually outweighs the additional personal income tax on the benefit-in-kind, but it depends on your specific tax position.
Do I need to be paid a salary to have company-paid PMI? No. Directors can have company-paid benefits even if they only take dividends. The benefit-in-kind is reported on a P11D regardless.
What happens to cover if I close the company? Most insurers offer a continuation option that lets you transfer to a personal policy without new underwriting, preserving cover for any conditions you’ve claimed for.
Can my contractors be on the company policy? Generally no; PMI tax treatment relies on the covered person being a director or employee. We can still quote individual cover for contractors.
Director quote? Call 0800 131 0400 or email info@insuredhealth.co.uk.
