Digital assets such as cryptocurrency have gained momentum in the last few years. They are not something that is only popular among the tech and elite circles any longer. The general population has taken to them as a legit mode of investment and follows their ups and downs with avid interest.
This being the case, more and more services are opening up to accepting crypto as a mode of payment alongside other traditional methods of payment. The health insurance sector is also experimenting with crypto as a mode of payment.
If you plan to buy a health insurance plan or pay insurance premiums for an existing plan with cryptocurrency, this may be possible in the not-so-distant future. Here’s how digital assets are redefining how the health insurance industry works.
What are the Benefits of Paying Health Insurance Premiums with Digital Assets?
The following are the benefits of paying for health insurance plans for family with digital assets.
- Borderless transactions:
Post the pandemic, more people across the globe are embracing the digital nomad lifestyle. There are also many expats living in foreign countries, and their numbers are increasing. Since you can make borderless payments with crypto, these two segments benefit hugely. Crypto can come in very handy for them when purchasing international health insurance plans. Those with little to no access to traditional banking systems can also benefit from paying health insurance premiums with crypto. Crypto is also useful for citizens of countries where the fiat currency is unstable.
When you have to buy an international health insurance policy using traditional fiat currencies, there will always be conversion fees involved. But payments through crypto are out of the purview of traditional banking systems. So, users do not need to pay conversion fees.
Hence, payments made via crypto ultimately end up putting more money in your pocket. Making payments with crypto also saves the time and effort spent converting currencies. Some companies may even offer discounts on crypto payments or give reward tokens as a way to promote crypto payments. This also leads to savings at the end of the day for the policyholder.
Not everyone is comfortable and upfront about discussing their health issues. This also applies to what they may want to spend on their healthcare needs. Using crypto to make health insurance payments offers financial privacy, which is not possible when buyers make payments using traditional routes. Crypto is a great way to protect your health-related expenses from prying eyes.
Crypto payments using blockchain or layer-2 technologies are super fast in comparison to checks and other traditional financial transactions. This can be particularly helpful if you want to make premium payments at the last minute. Missing payments for health insurance premiums can often lead to policy cancellation if the insurer doesn’t offer a grace period.
- Dependency on banking systems:
The traditional banking cartels across the globe have long been dictating every financial move we make and have control of our assets, whether we like it or not. This is no longer the case, as crypto makes more inroads into the mainstream. Payments still have to be made through the traditional banking route in most countries, though. And not everyone has access to these routes for various reasons. So having the option to pay for health insurance with crypto can really help them take charge of their health without having to depend on banks.
What are Some of the Challenges When It Comes to Integrating Crypto Payments with Health Insurance?
- Limited acceptance: While crypto is gaining acceptance as a real-world asset and is no longer considered as a figment of a tech bro’s imagination, it still has a long way to go. Many insurers have not yet given crypto payments their blessings. But this will change in the future as blockchain technology evolves and crypto becomes more mainstream.
- Security: Hacking and theft of digital assets remain a big problem. While blockchain offers a lot of security, the same can’t be said about wallets and crypto exchanges.
- Volatility: Cryptocurrencies are volatile, and their value fluctuates constantly. This affects the policyholder and the insurance companies. If the value rises, the policyholder will not have the heart to part with it, as crypto is essentially still viewed as an investment by many rather than as money that can be spent on goods and services. If the value goes down, insurers will not be able to maintain profitability.
Health insurance companies are already in the process of adopting AI and blockchain technologies into their products to make them more customer-friendly. They are being employed to help onboard customers, sort their queries, and smoothen the claims process. All this has led to increased transparency for the industry. One can hope that crypto payments also get wider acceptance by the insurance sector in the days to come to further transparency and enhance customer-friendly payment processes.