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Canadian insurance companies offer private health and dental insurance to lower the burden of medical expenses not covered by provincial plans. Typically, purchasing private insurance is not worth the cost for small businesses or employees. For large corporations, it may make sense as they can pool their resources and achieve economies of scale.

One of the main reasons for this is that insurance is most beneficial for unseen and unpredictable events, such as a car accident or flood. Many health-related risks such as health and dental maintenance are planned events, meaning that you can plan for the expense and won’t be hit with an unexpected $ 20,000 bill. Even in the scenario of an unexpected dental bill, your insurance provider likely wouldn’t cover the full cost anyways, as they only cover costs over the deductible, which is typically not a lot.

For individuals and small businesses, there are alternatives to private health insurance.

1.  Personal savings

Good financial planning includes keeping a small reserve fund for unexpected expenses, such as a larger then anticipated dental bill. Having a reserve fund ensures your budget stays on track.

2.  Health Spending Account

For small businesses, a health spending account allows the company to control the employee’s benefits and ensures that you do not lose money to unrecoverable premiums in a low claim year.

From our experience, private health insurance is not cost-effective for individuals or small businesses. There are better cost-effective alternatives to consider. Northfront Insurance specializes in alternatives to private health insurance and much more. If you would like to speak with someone to get more information on how a health spending account could help you, please connect with us.

About Northfront Financial

Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst® (CFA®), Chartered Investment Manager (CIM®), and Certified Financial Planner™ (CFP™) designations.