Sir, - The present cost advantage that BUPA has over the VHI with regard to an equivalent health insurance "package" springs from their provision of an optional age-based cash plan (not presently allowable for income tax relief) which is additional to the core community-rated plan which is allowable for income-tax relief.

The VHI plans are fully community rated and allowable against income tax. The cost advantage of the BUPA plans (for those healthy under-50s likely to pick these plans) could be reduced or eliminated if the Minister for Finance restores in his next budget the situation whereby the cost of community-rated plans can be allowed against the taxpayer's highest tax rate, instead of the present situation where these charges are allowable at the standard rate of 27 per cent. This will favour insurers who offer a full community-based plan by penalising plans using weighted charge structures to skim off low-risk customers.

BUPA's age-weighted cash plan could qualify for the tax relief by removing the weighting, and charging a flat fee proportional to the cash benefits only. Could I also recommend that the VHI's telesales personnel quote the pretax and after-tax cost of their insurance plans, since one is 27 per cent lower than the other! - Yours, etc.,

87 Glenageary Avenue, Glenageary, Co. Dublin.

PS The competition is welcome.