Star Health, India's largest health insurance company, launched India's first ever insurance policy with a monthly payments option for the premium. Until now, all insurance policies in India come with a yearly payment option.
The policy has been launched in tie-up with PhonePe, one of India's top digital payments app.
Customers can buy coverage of up to Rs. 1 crore and pay premiums monthly using PhonePe's UPI AutoPay feature.
Vishal Gupta, CEO of PhonePe Insurance said the move will increase insurance adoption in the country.
The policy covers OPD and maternity, ambulance expenses, out-patient consultations and treatments, organ donor expenses, newborn baby coverage, and vaccination costs.
The policy also covers mental illness, provides wellness programs, annual health check-ups, and offers accidental death and permanent disability coverage up to Rs. 1 crore.
To purchase the policy, users can navigate to the Health Insurance section in the PhonePe app, select the insured members, choose the sum insured and payment tenure, and complete the necessary details and declarations.
In recent years, fintech players like PhonePe and Paytm -- who started life as payment wallets -- have emerged as significant distributors of financial products, including insurance and loans.
These companies are leveraging their vast user base and digital infrastructure to offer financial services to millions of Indians, many of whom have been traditionally underserved by the formal banking system.
By partnering with established financial institutions and insurance providers, fintech companies are able to offer a wide range of products and services to their customers.
This trend has become a viable source of revenue for fintech players, as they earn commission fees for originating loans and policies. For example, Paytm, one of India's largest fintech companies, now generates a significant portion of its revenue from financial services. In the fiscal year 2022-23, Paytm's revenue from financial services grew by 350% year-on-year, accounting for nearly 30% of its total revenue.
The company's success in this area can be attributed to its partnerships with leading banks and insurance providers, as well as its ability to leverage its large user base and digital infrastructure to distribute financial products efficiently.
Founded in 2015, PhonePe has rapidly grown to become one of India's most popular digital payments platforms, with over 520 million registered users and an annualized total payment value of $1.5 trillion. It is currently owned by US supermarket chain Wal-Mart.
Star Health and Allied Insurance Company, founded in 2006, is India's largest retail health insurance provider over the years. It was the first standalone health insurance company in the country and was aggressive in its marketing.
The company has introduced several industry-first features and benefits, such as coverage for pre-existing diseases, no claim bonus, and lifetime renewability. Its network covers over 14,000 hospitals across India.
In recent years, Star Health has outpaced traditional insurance players in the health insurance market. The company's gross written premium has grown at a CAGR of over 40% between FY18 and FY23, reaching Rs. 12,952 crore in FY23. This growth has been driven by a strong distribution network, with over 6.84 lakh agents and a significant presence in the bancassurance channel.