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  • Anne Chu

How to Lower Your Health Insurance Premiums

Updated: Jan 20, 2021

Singapore has one of the best healthcare systems on the globe, but the flipside of the coin is that healthcare here also has a high price tag. That’s part of why many are now investing in private health insurance to complement their MediShield Life coverage.

If you’ve done this yourself, you’re probably wondering how to control the costs of your private plan by bringing down your premiums.

There are several ways to do this, as a matter of fact. From opting for a higher deductible to getting a long-term plan, there are many things you can do to lower health insurance premiums -- we’ve listed them below.

But before you try any of them, a word of caution: remember that the cost of your health insurance is ultimately of less concern than its actual value.

Your chief goal should still be to ensure that you’re getting adequate coverage, not just paying less. Bear that in mind when implementing any of the following tips for lowering your plan’s premiums.


#1. Consider picking a higher voluntary excess/deductible.

The excess or deductible is the amount you have to pay (as the policyholder) before the insurance company starts paying your benefits. Let’s take a hypothetical example to see how it works.

Let’s say you have an insurance plan where your excess or deductible is set at $200.

Let’s say you have an insurance plan where your excess or deductible is set at $200.

Now let’s say you end up needing medical services that cost $1,000 in total. Let’s say these services are all considered covered services under your plan.

Before your insurance pays for anything, you’re obliged to pay the deductible or excess first.

Since it’s $200 for your plan, that means you have to pay the first $200 of the $1,000.

That leaves you with a $800 bill, of course. That’s what your insurer will pay.

Anyway, most insurers will give you an option to volunteer the deductible or excess amount for your plan. That means you can opt for higher or lower deductible amounts.

The general rule here is that the excess and premium of a plan have an inverse relationship. A higher excess will mean a lower premium; a lower excess will mean a higher premium.

Ergo, picking a higher voluntary excess will lower your health insurance premiums. Be warned that it obviously means higher out-of-pocket fees whenever you file a claim, though.

As such, you should still exercise some restraint when using this method to lower premiums. It may not be suitable for all situations.

On the whole in, it only makes sense if you don’t expect too many healthcare expenses. Otherwise, the higher-premium plan may actually save you more money in the long run.

#2. Consider a long-term policy.

Sure, we’re all familiar with annual premium payments. But some insurers actually offer multi-year (such as 2-year) payment options.

In most cases, multi-year premium payment schemes translate to lower premiums. If you want to stick with the same insurer for more than one year and want to spare yourself the trouble of paying once per year, go ahead and do a multi-year payment.

#3. File a no-claims bonus.

The no-claims bonus is a reward insurance companies give policyholders for not filing claims over a set period of time, usually a year. The longer you go without filing a claim (the more years you keep this up, in particular), the better the bonus!

Be sure to check that you’re getting a no-claims bonus with your insurer at the end of each “claim-less” year. No-claims bonuses can shave a significant percentage off most insurers’ premiums.

Note that different insurers may have different scales for their no-claims bonuses, by the way. You’ll have to check with yours how much of a discount you’re due for this bonus.

#4. Drop your bad habits.

Whether you smoke too much or drink too much or even weigh too much, this is the perfect time to change that. Bin the cigarettes, regulate liquor intake, and start exercising.

What does this have to do with your insurance premiums? A lot, actually.

A lot of insurers consider factors like these when calculating your premiums. Smoking in particular can elevate your premium by a fair amount.

Living a healthier life means insurers are less likely to have to cover medical fees for you in the future: they foresee fewer obligations with you as a policyholder. As such, you get charged lower premiums for living healthier.

#5. Find an advisor to help you.

When trying to lower premiums, you may want to find out a number of things, like whether yours are actually in line with the market standard or if there are other ways to lower them. For things like this, we recommend getting professional help!

Insurance brokers and financial advisors can do a lot for you in this area. They can identify ways to lower your premiums, compare insurance plans (if you want to switch plans or insurers), and more.

If you want to get started on that right now, reach out to us. We can connect you to advisors capable of guiding you through the insurance marketplace and insurers’ terms.

With their help, you’ll be able to find the best insurance plans or premiums for your situation. They will do their utmost to ensure you get the policy that will serve you best both now and in the future.

Connect with us now and talk to an expert on Singapore’s insurance market!

Written in collaboration with our financial advisory partners at Virtus Associates.


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