28-09-2020
Now you can buy health insurance just like you buy monthly Netflix subscription
Insurance AlertssNow you can buy health insurance just like you buy monthly Netflix subscription
A ₹20 lakh health insurance cover for a 30 year old may cost around ₹13,000 for one year. Most individuals delay their decision to buy a health insurance policy as they do not want to shed out this sum in one go. Here's a solution. A new digital health and wellness market place, Vital is offering monthly subscription plan for health insurance just like you pay your monthly EMIs or pay for your Netflix subscription on a monthly basis.
Vital has created monthly subscription plans from scratch, which are not linked to a credit card. "While life insurance companies allow to pay premiums on a monthly, quarterly or yearly basis, health insurance offers yearly model for premium payment. By offering monthly subscription model where individuals can pay the premiums on a monthly basis, we aim to make health insurance buying more affordable. This will also help to increase insurance penetration in our country," says Jayan Matthews, co-founder and CPO at Vital.
IRDAI, the Insurance Regulator allowed monthly premium payment mode in September 2019 but most health insurers still stick to annual premium payment. Mathews also tells as affordability rise, average insurance cover also goes up. "Average health insurance cover that most people prefer to buy is around ₹3 lakh but due to the monthly premium pay model, the average insurance size on Vital platform is ₹10 lakh," says Mathews.
As of now, Vital has tied up with Care Health Insurance (formerly known as Religare Health Insurance) to provide health cover to individuals. For group policies, Vital is working with Bharti Axa and ICICI Lombard and Care Health. Continuing with the same example, for a similar ₹20 lakh health insurance cover, a 30 year old healthy individual will need to pay around ₹700 monthly via Vital platform. Monthly premium of a few hundreds looks highly affordable as against paying over ₹10,000 for a year in one go.
Vital also offers 'deductible' facility which will reduce the costs even further. The deductible is the amount of money you will have to pay for your health expenses before your health insurance plan coverage starts in a given policy year. Higher the deductible, the lower your premiums.
Here's how deductible helps to cut down your premium cost. In the above example, if the 30 year old individual adds a deductible of ₹35,000 in the same policy cover of ₹20 lakh, the premiums will more than half from ₹700 per month to 300 per month. A deductible of ₹1 lakh will cut down the premium to ₹230 per month.
Monthly subscription model for health insurance can be useful for those who have lost their jobs or suffered pay cuts during the recent few months amid Covid. However, currently the option to select a health insurance provider with Vital's monthly subscription plan is limited. Hope more insurance companies adopt monthly premium payment for its policyholders to make this effort a wide success.
Source: Live Mint
