New IP riders attract heightened interest but sales remain muted for some insurers

AI generated

SINGAPORE – Despite heightened interest, the new optional private health insurance products launched since April have yet to see widespread uptake.

Five of the seven Integrated Shield Plan (IP) insurers told The Straits Times they have seen increased interest in or received more queries about the new IP riders.

However, only three reported strong or healthy uptake – an indication that the keen interest has translated into actual sales for these insurers.

Against the backdrop of rapidly rising private hospital bills and health insurance claims, which in turn drove up premiums – especially for IP riders – insurers were required by the Ministry of Health (MOH) to introduce new riders from April, with one key change being that the new riders could no longer cover the minimum IP deductibles set by the ministry.

MOH has said this move was aimed at helping to “instil discipline in healthcare consumption”.

This is because policyholders have to pay the deductible out of pocket when they are hospitalised or receive certain treatments before tapping their private health insurance to cover the rest of the bill.

In addition, the cap on the co-payment – the amount the patient has to pay after accounting for the minimum IP deductible – was doubled to $6,000.

In turn, the new products cost less, with annual premiums 16 per cent to 84 per cent lower than those for the previous riders.

Three of the seven IP insurers said they had seen a favourable market response to the new riders.

Prudential Singapore’s chief health officer, Sidharth Kachroo, said there was a month-on-month increase in the number of its new IP riders sold from April to June, driven by “growing awareness of health and protection needs, as customers consider rising costs for hospitalisation, recovery and care needs”.

AIA Singapore said it had seen “strong uptake” and that “customer interest and demand for the new IP riders remain strong”.

Great Eastern received a heightened level of queries and said it “continues to see healthy take-up rates in its riders among those purchasing private and restructured IPs”.

However, as the company had introduced riders that do not cover the deductibles in 2024, there was a “stable, smooth trend” in the uptake of the new riders launched in April, rather than a spike.

Statistics from Great Eastern showed that policyholders were generally receptive to no-deductible cover riders, as there was a 5 per cent year-on-year increase in 2025 for new IP business topped with such riders, which cover up to the level of private hospital stays.

Raffles Health Insurance (RHI) saw an increase in enquiries and interest following MOH’s announcement, but “this has not yet translated into a corresponding increase in rider take-up”, said its general manager, Ben Siah.

In fact, the proportion of RHI’s new IPs sold with riders had fallen in April and May compared with the second quarter of 2025, he added. This means that fewer of those who purchased new IPs in April and May chose to add a rider.

Nonetheless, Siah said it was too early to determine if the initial interest would lead to higher sales in future, as the market could be going through a transition period as consumers sought to better understand the new products.

Income Insurance said it was too early to definitively conclude that the general interest from its existing policyholders and prospective customers would eventually translate into purchases or rider switches, as “customers may need more time to understand the rider design and differences”.

HSBC Life and Singlife did not observe any heightened level of queries or interest related to the new riders.

Riders are sold on top of IPs and are generally meant to cover the patient’s share of the bill – that is, the deductibles and co-payment; the rest would be paid by the insurer or the national MediShield Life scheme.

All Singaporeans are insured under MediShield Life, which covers expenses for hospitalisation and certain outpatient treatments, such as kidney dialysis and radiotherapy for cancer.

The optional private IPs provide coverage on top of MediShield Life, typically covering stays in private hospitals and A or B1 wards in public hospitals.

Slow market response not surprising to analysts

Eddy Cheong, chief executive of insurance advisory company Havend, said it was likely that a significant portion of policyholders were still not aware of the changes, and those who had switched could be the more attentive ones.

In addition, there could be friction in switching if policyholders do not fully understand what the move would mean or receive the necessary guidance, so they would rather stay with their existing plans, said Cheong.

“For many, the moment of truth comes only at their policy renewal – over the next 12 months from April 1, 2026 – when they realise the actual premium,” he added.

Public health specialist Jeremy Lim said: “While Minister Ong (Ye Kung) is absolutely right about the logic of downgrading, inertia and default bias are strong, and hence many would simply continue with their existing plans.”

Referencing the introduction of government schemes such as CPF Life and SkillsFuture credits, Lim said it would take time for policy guidance to flow through, and any change is expected to take years.

Alex Lee, president of the Singapore Actuarial Society, said it is indeed more sustainable for one to choose a health insurance plan which he or she can afford throughout life, rather than being forced to drop or downgrade the rider when they are older and face much higher premiums and yet need more care at that point.

However, for someone who already has a rider, the premium savings of between $300 and $1,000 for that year could be wiped out if they were to suffer a major accident or illness soon, as switching to new riders would mean bearing an additional $5,000 to $10,000 in deductibles and co-payments.

In addition, some may feel that if they cannot pay the additional cost, it could mean major health impairment or even death, Lee added. Therefore, even if the overall outcome of switching to new riders is certainly better, somebody with enough savings might still decide to retain their existing rider.

Sales driven by new customers rather than switches

Both AIA and Income said those who bought their new riders were mainly new policyholders, rather than those who switched from older riders.

Though RHI did not see an increase in rider uptake, Siah similarly said the majority of those who bought the new RHI rider were those who did not hold its previous rider.

This suggests that the new riders are attracting new customers more readily than prompting existing policyholders to switch.

A key expectation ahead of the changes was that some policyholders would choose to downgrade to the new riders, especially those who find it hard to keep up with the escalating premiums.

In December 2025, Health Minister Ong said policyholders should discuss the impending changes with their financial advisers and that “most likely you may find it (referring to IP riders) is not worth it and that is when you may want to downgrade”.

In his April 1 Facebook post, he reiterated that policyholders with riders would probably benefit if they switch to new riders as “the premiums saved every year will be more than enough to offset the higher co-payment for the occasional hospitalisation episode”.

Cheong said that rather than reading the situation as possibly running contrary to policy intent, he said it could be the result of two distinct scenarios playing out at different speeds.

On the one hand, those who did not get a rider due to costs are now drawn to the new and more cost-effective riders.

On the other hand, downgrades will take longer to play out because younger policyholders may still find current premiums affordable and hence face no immediate urgency to switch, while those who are older, especially those aged 60 and above, and face increasingly higher premiums, may gradually shift towards the new riders.

Lim echoed that the spurring of new business was expected, as “we have in effect provided cheaper rider options”, including to those previously priced out of the rider market.

At least one insurer has also seen cost affordability come into play. Income launched two new riders in April, and of the two, it said the uptake of the lower-tier option – which has lower premiums – has been more popular.