How does billing on the Root platform work?

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There are various factors that can impact a premium calculation and result in the policyholder being charged a different amount to their regular premium. We’ve put together a list of questions that will help you understand what these factors are and why they are important.


What is the policy transaction history?

To ensure that a policy is always billed correctly we keep a record of all financial transactions on a policy. Think of this as a ledger for the policy. This transaction history can be viewed on the Root dashboard.




All premiums payable for a policy are tracked on a monthly basis. Premiums are debited against the policy when they are due. If a payment is successful, the policy is credited to balance the policy ledger. 

If no premiums are outstanding, the policy will have a R0.00 balance. If an amount is owed, the policy will have a negative (-)  balance. If an amount is credited to a policy, such as when the policyholder pays more than the premium that is due, the policy will have a positive balance.


 If a premium is missed the ledger will stay in a debited state, and there will either be a payment retry or this premium will be collected along with the new premium on the next billing day.


What is pro-rata?

An amount that can be charged when a policy is issued. It is calculated based on the number of days that the policyholder has insurance for that is outside of their billing cycle.



Kurt’s policy start date is the 25th of January, but his billing day is the 1st of the month. Kurt will be charged a pro-rata fee for the 25th of January to the 31st of January, because he has insurance for those days but they are not included in his premium.


On Root, there are two ways in which a pro-rata fee can be billed:

  • When the policy is issued
  • On the policy billing day

This is a setting that is individually configured for each product module, and does not apply to all product modules.


What is a billing day adjustment?

Policyholders have the option to change the day that they’re debited for their monthly premium on. If this is done after the policy has started, their next premium may be a different amount to what they are usually charged.


Example 1

Cathy’s premium is R120.00 per month, and her billing day is the 25th of every month. On the 2nd of the current month, she requests that she gets billed on the 1st of every month. Her first premium on her new billing day will be higher than usual. It will include her insurance for the 25th of this month to the 25th of the following month, plus the 26th to the 1st (her new billing date).

  • Her regular premium = R120.00.
  • A billing day adjustment fee to cover the 5 days between the 25th to the 1st of the new month = R24.00.
  • Cathy will be billed R144.00 on the 1st. This only applies to the first premium after she changed her billing day. As of the following month, she will pay her regular premium again.


Example 2

Thando’s current premium is R270.00, and their billing day is on the 15th of every month. On the 27th of the current month, Thando changes their billing day to the 1st of every month. Thando will be charged less on their next billing day.

  • Their regular premium = R270.00.
  • Thando has already paid a premium for the 15th of this month to the 15th of the following month.
  • When Thando is debited on the 1st, it will only be 15 days into the current billing cycle. The remaining 15 days have already been paid for, so Thando will only have to pay for the 16th - 30th of the new month.
  • Thando’s policy will be credited and they will pay a reduced premium of R135.00 on the 1st. This only applies to the first premium after they changed their billing day. As of the following month, they will pay their regular premium again.

I’ve tried to update a policy’s billing day but the day stays the same. Why can’t I make this change?

The billing date of a  policy cannot be adjusted if there is a payment that is in a processing or pending state, and the new billing day is within 10 days of the current billing day.  The billing day will automatically update to the day that you changed it to once the payment completes, and the policy will be billed on the new billing day in the following month. This is to avoid double debiting the policyholder.

We’ve set up some examples to help you understand how this works:

In all the following examples, the customer’s next billing day is on 30 November.  The product is configured to use 2-day debit orders, so Root will create a  payment and submit it to the bank on 28 November.


Example 1

Sophie calls in on 22 November to change their billing day to the 9th of every month. No payments have been created for 30 November yet. Therefore, the change takes immediate effect, and Sophie will next be billed on 9 December.


Example 2

Ryan calls in on 30 November to change his billing day to the 9th of every month. A payment for 30 November is currently being processed. The next possible billing day, which would be 9 December, is within 10 days after 30 November. Therefore, the change will take effect the following month, and Ryan will next be billed  on 9 January. Ryan will be billed a higher premium than usual because he has not been billed for December yet.


Example 3

Nikita calls in on 30 November to change her billing day to the 12th of every month. A payment for 30 November  is currently being processed. The next possible billing day, which is 12 December, is not within 10 days after 30 November. Therefore, the change will take immediate effect, and she will next be billed on 12 December.


Why has the policyholder been billed an amount that is different from their regular premium?

If the premium on an existing policy is different than usual, there are three reasons this can happen:

  • The policy is in arrears and the platform has attempted to collect the outstanding premium(s) + the current premium.
  • The billing day of the policy has been changed.
  • Changes have been made to the policy schedule e.g. a dependent was added/removed.

If the premium on a new policy differs from the expected premium, it is most likely because a pro-rata fee has been billed and added to the first premium.

Payment retry: Depending on the settings for a product on the Root dashboard, payment for a missed premium can automatically be retried. This setting is only enabled if it is requested by an organisation.


Billing cycle: The amount of time between two billing statements/premiums being collected. It is usually 30 days long.

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