Health Insurance on EMIs! Why is it a Good Idea?

To make the medical insurance more affordable for people, IRDAI in 2019 asked the insurance providers to offer additional premium payment frequencies by filing minor modifications in the existing policies.

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    With the availability of paying health insurance premiums on EMIs, you can pay a fixed amount every month towards your mediclaim policy. You can enjoy your peace of mind without worrying about paying a hefty premium every year. Thus, paying health insurance premiums on instalments is a wise decision.

    Why Was this Provision Introduced by IRDAI?

    As most of the people in India do not have medical insurance cover. The reason behind it is the need to pay the premium at once, which might seem like a financial burden to some. The main objective is to make health insurance more accessible and affordable. Furthermore, people who do not want to pay the annual premium can now opt to pay the premium in EMIs.

    Reasons to Buy Health Insurance on Installments

    People who found it difficult to pay the premium in a lump sum can now consider paying the health insurance premium on monthly instalments for the following reasons:

    • Till now people in small towns, especially in rural areas are far from the concept of the health insurance cover. With instalments, it will become comparatively cheaper and accessible to them
    • The urban population is also going to benefit from this provision, as people find it more convenient to pay instalments than to pay the entire amount in a lump sum
    • It’s preferable to buy health insurance online, especially during the ongoing COVID-19 pandemic, when everyone is following the social distancing norms. The premium can easily be paid online through our site. Moreover, it is possible to opt for automatic debit on a specific date from their account, so that you do not miss out on the premium instalments
    • This new provision of health insurance premium payments in EMI will help in flourishing both the insurer and the policyholders in the long-run

    Why is it a Good Idea to Pay Health Insurance Premium on EMI’s?

    In Apr-Aug quarter 11% of the medical insurance claims alone were from COVID patients this year. As more and more customers are inclined towards buying health insurance online amid the going pandemic, the payment of premiums on EMI will make it easier for them to buy an insurance cover.

    Let’s discuss further why it can be a good option to pay your policy premium through monthly instalments:

    • Rise in Health-related Problems:Due to sedentary lifestyle and unhealthy eating habits, there is a significant rise in lifestyle diseases and critical illnesses like cardiovascular-ailments, diabetes, cancer, kidney failure, etc. Even if you pay your policy premium in instalments you can get coverage for hospitalization related to any such illnesses including Coronavirus treatment.
    • Expensive Medical Treatments: With the advancement in medical technology, the cost of hospitalization and treatments has become quite expensive. With easy EMI premium payment, it will be easier to financially cover your medical expenses with health insurance policy.
    • Opt for Higher Coverage Amount: With the flexibility to pay the premium in instalment, it becomes easier for the applicants to a higher coverage amount without the need to pay the premium in one go. You don’t need to compromise on the treatment as you can avail the benefits by paying the premium in instalments. The premium for young applicants will be lesser in comparison to senior citizens.
    • Coverage for Self and Family: Health issues do not come with prior notice and can put financial burden anytime. But you can now secure your family without worrying about the premium, as it can be paid every month or quarter as per your convenience and budget.
    • Easier to buy Health Insurance for Senior Citizens: With the option to pay the premium every month, elderly people will not have to compromise on their health, as they can now afford to pay for health insurance even with their limited monthly pension or income, without feeling the financial burden.
    • Tax Exemption Benefits: The premium paid in instalments is also eligible for tax benefits under section 80D of the Income Tax Act of 1961.

    How to Calculate Premium for Health Insurance?

    The information required to calculate the medical insurance premium is mentioned below-

    • Sum Insured Amount
    • Selected Health Insurance Plan
    • Type of Policy Coverage
    • Family Members Insured
    • Age of the Insured Family Members
    • City of Residence

    However, you can use a health insurance premium calculator online to evaluate the cost of the premium. All that is required is to enter the below information-

    • Personal details- DOB or PAN number
    • Gender
    • Policy Term
    • Sum Insured
    • Coverage for self, family or spouse
    • And then click to get the health insurance quotation

    Sum Insured Option (in Rs.)

    Members to be Insured

    Monthly Premium Exc. Taxes

    3 Lakh

    Self

    Rs 445 (approx.)

    5 Lakh

    Self + Spouse

    Rs 852 (approx.)

    Rs 7.5 Lakh

    Self + Spouse + 1 Child

    Rs 1170 (approx.)

    Rs 10 Lakh

    Self + Spouse + 2 Children

    Rs 1462 (approx.)

    Sample Table for Health Insurance Premium Paid in EMI’s

    *The premium mentioned is without GST for members lesser than 35 years of age from Tier 2 cities. The above table is for reference only, the premium varies based on the insurer and the type of health insurance plan purchased

    1. Filing Health Insurance Claim before Paying the Health Insurance for the Complete Policy Term

    So, if you are paying the premium every month, and you need to file a claim within six months of paying the premium, then the insurer will be processing your claim. However, it might deduct the remaining instalments or you would need to pay the pending premium amount to avail the claim benefits. Simply put, it will have no impact on the overall claim procedure.

    2. Changing the Mode of Premium Payment in the Existing Medical Insurance Plan

    The policyholders can change their mode of premium payment at the time of policy renewal. However, it is not possible to make modifications in the interim period. Those who are looking forward to opting for a different mode of premium payment would need to mention that in the policy form at the time of renewal.

    3. Premium Cost on Opting for EMI Paying Facility

    The basic premium cost doesn’t change whether you opt for a monthly, quarterly or half-yearly premium payment option. However, in some cases depending on the insurer and the type of health plans, some insurers can charge a slightly higher premium.

    4. The Free-look Period on Opting for EMI Facility

    Most of the health insurance plans provide a free-look period of 15 days after the policy commencement. During this period the policyholder can withdraw the policy without any penalties when opted for annual premium payment option. And if you chose to pay your policy premium on EMIs i.e. monthly, quarterly, or half-yearly, then the insurer might cut short the free-look period.

    In a Nutshell

    All the policyholders across India seem to have welcomed the EMI option to pay the health insurance policy premium. It makes health insurance reasonably priced for the lower-income groups and we have witnessed a sharp increase the policy buyers since the instalment option has been announced.

    Written By: PolicyBazaar - Updated: 01 October 2021

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