Assessing your insurance options should NOT be about trying to get the best return on investment. If you’re winning at insurance, you’re losing at life. Insurance only pays out when something bad has happened. In most cases, you’d be better off had you NOT had to make an insurance claim.
- For life insurance to pay out, someone must die.
- For disability insurance to pay out, someone must be too hurt or sick to work.
- And for health insurance to pay out, someone must be suffering an illness or injury.
Insurance companies are very good at managing risk. And when it comes to group health insurance, they do a great job of pooling the risk associated with unexpected healthcare costs. When you buy health insurance, you’re buying certainty; Certainty that for the period of your contract, typically one year, your monthly cost per employee won’t change. Over the long term however, your rates will be adjusted base on claims, yours and ALL the insurer’s clients. High Claims = High Costs. The house always wins.
What about low claims? Have you ever received a refund on your insurance premium? (If you have, please contact us immediately. We’d like to switch insurance providers!)
On most health insurance plans services are capped. There are limits to the amount you can claim for each service covered under your plan. And if every employee maxed out every allowance, you would be winning at insurance, but your team would be losing at life. “Let’s go to the dentist for fun…” said nobody, ever. Employees generally use only what they need.
Red Seal Financial Ltd. offers a pay-as-you go solution that enable your business to offer health benefits that are tax deductible to you as a business and are non-taxable to the employee on a “cost +” basis. And it can be structured to offer the same coverage and limits as your current plan.
If your business has:
- Stable, consistent cashflow and can weather some variability in monthly claims;
- A long-standing employee base with low turnover; and
- Demonstrated low usage over several years;
You may be a good candidate to consider self-insuring your employee’s health costs. Rather than pay an insurance company to process routine claims, self-insurance can save you between 10% to 30% annually on your health insurance costs letting you put the savings right back into the plan for the benefit of your employees.