- Explore the advantages and disadvantages of claims-based pricing in insurance policies.
- Understand how claims-based pricing can impact premiums, coverage, and overall insurance costs.
- Learn key considerations to help you decide if a claims-based pricing insurance policy is suitable for your needs.
What does claims-based pricing mean in insurance policies?
Claim-based pricing policies have premiums that become cheaper when and if you do not make any claims. The amount that you pay for your policy premiums changes based on the number of claims that you make. It is also affected by the monetary amount of the claims. The higher the dollar of the claim, the more expensive your premiums will become.
How does it work?
- Smaller / Lesser / No Claims = Lower Premiums the Next Year
- Bigger / More Claims = Higher Premiums the Next Year
Pros of Claims-Based Pricing Policies | Cons of Claims-Based Pricing Policies |
|---|---|
Rewards with lower premiums when no claims are made
| More expensive premiums when sick/treatment is needed
|
Encourages responsible insurance claims (no over-claiming) | People can get afraid to use their insurance when they really need to |
Keeps insurance and healthcare affordable for everyone | Uncertainty of future premium prices as prices are not fixed |
Insurers offering claims-based pricing policies
Depending on the insurer, different policies have different multipliers too. In general, claims-based policies in Singapore tend to give an average of 20% discount when no claims are made.
Policy | Quick Facts |
|---|---|
AIA Max VitalCare
| What is it?
This is a rider that you purchase IN ADDITION to your AIA HealthShield Gold Max A policy
Benefits
|
Great Eastern GREAT TotalCare
| What is it?
This is a rider that you purchase IN ADDITION to your GREAT SupremeHealth policy
Benefits
|
Prudential PRUExtra
| What is it?
This is a rider that you purchase IN ADDITION to your PRUShield policy
Benefits
|
Should you get a claims-based insurance policy?
Overall, getting a claims-based rider for your health insurance policy is beneficial as it encourages us to take active steps towards living a healthier life.
