A ₹20 lakh health insurance cover for a period of 30-year-old may cost around ₹13,000 for one year. Most of the individuals don’t want to shed this amount of money in one go so they delay their decision. Here is the solution. A digital health and wellness marketplace, Vital is offering a 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 a monthly subscription health insurance plan which is not linked to a credit card. “While life insurance companies allow paying premiums on a monthly, quarterly, or yearly basis, health insurance offers a yearly model for premium payment. By offering a 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.
Though IRDAI, the Insurance Regulator allowed monthly premium payment mode in September 2019 still most health insurers are stuck to the 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 care 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 the Vital platform. Monthly premium of a few hundred looks highly affordable as against paying over ₹10,000 for a year in one go.
Vital also offers a ‘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.
A monthly subscription plan for health insurance is a good option for the people who have lost the job or the people who are suffering pay cut due to the COVID pandemic. 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.