Perfect for health nuts: These 3 claims-based pricing insurance plans may push up your savings

Besides the obvious reasons for staying healthy (being illness-free and looking attractive), there is also insurance merit to keep fit. Insurance companies in Singapore are starting to adopt claims-based pricing, a fairer method of pricing for consumers that also encourage them to look after their health.

Claims-based pricing takes reference from the no-claims discounts that are offered for car insurance plans, where your premiums are lowered if you don’t get into a car accident.  

Here’s what claims-based pricing is and why insurers are easing into this new pricing model. 

What is claims-based pricing?

You only pay for what you ‘eat’. 

Your premiums are adjusted and determined based on the number of times you make claims (or don’t) during the past year. It is also affected by the monetary amount of the claims made. 

It rewards customers for good health and good ‘behaviour’ — not claiming or overclaiming when you don’t need to. This problem of overconsumption is the underlying reason for co-payment being compulsory for Integrated Shield Plans (IP). 

Is claims-based pricing all that good? 

Which insurance plans offer claims-based pricing?

Being rewarded for good driving isn’t the only way you can receive discounts on your insurance premiums. 

Here are the Integrated Shield Plans that have now introduced claims-based pricing for their riders.

AIA Max VitalCare (rider for AIA HealthShield Gold Max) 

Attached to AIA HealthShield Gold Max, AIA Max VitalCare is a rider that features a 5 per cent co-payment, capped at $3,000 for treatments with pre-authorisation or done by AIA Quality HealthCare Partners (AQHP). AIA customers that had AIA Max Essential A policies would have been converted to AIA Max VitalCare upon policy anniversary from April 1, 2021. 

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With the claims-based pricing for AIA Max VitalCare, consumers can get up to 25 per cent discount off their Standard Level premiums if no claims are made. There is also no increase in the premium levels if you choose to opt for treatment at a public or restructured hospital. However, your premium levels will be affected if you receive treatment at a private hospital.  

AIA Max VitalCare has five different premium levels, starting with the Standard Level (lowest premium level), followed by Level 1 and all the way to Level 4. Your claim amount and choice of hospital will determine your premium level and how much your premium will be multiplied by.

Here’s what the premium levels look like: 

From the image above, you’re incentivised to stay at the standard level as long as possible, in order to reduce your premiums by up to 25 per cent. 

The type of claim you make, as well as the amount of claim paid, will affect your premiums. Here’s how your policy claims will affect your premium levels each policy anniversary:

Great Eastern GREAT TotalCare (rider for GREAT SupremeHealth)

Great Eastern terms this as claims-adjusted pricing, with it being applicable to policyholders of GREAT TotalCare (Elite-P or Classic-P).

With the claims-adjusted pricing, policyholders will start at the Standard Premium Level. By looking after your health with no claims made, you stay in the Preferred Premium Level and enjoy a 20 per cent discount off your next policy renewal. 

Here’s how your premium is determined by the claims you make: 

Prudential PRUExtra (rider for PRUShield) 

For Prudential, claims-based pricing is applicable for PRUExtra, a rider that can be added onto PRUShield. There are four different types of PRUExtra plans: PRUExtra Premier CoPay, PRUExtra Preferred CoPay, and PRUExtra Premier# and PRUExtra Plus#.

By not making claims on your PRUExtra plan, you will earn 20per cent off your Standard Level premiums during your next renewal premium. Here’s what Prudential’s premium levels look like:

To lower the premium level, this is the criteria set out by Prudential. You’ll enjoy lower premiums if you don’t make claims or if you only receive treatments at restructured hospitals. 

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Similarly, the higher your claims, the greater the increase in your premiums. 

In addition to the three plans listed above, Aviva has indicated plans to launch their own claims-based pricing in 2022.

Armed with the knowledge that you can bolster your wallet by keeping fit, get started on your fitness journey with these cheap gym memberships, workout apps and fitness trackers.

Protected up to specified limits by SDIC.

Note: This is only product information provided. You may wish to seek advice from a qualified adviser before buying the product. If you choose not to seek advice from a qualified adviser, you should consider whether the product is suitable for you. Buying an insurance product that are not suitable for you may impact your ability to finance your future healthcare needs.

If you decide that the policy is not suitable after purchasing the policy, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by the insurer in underwriting the policy.