Health Insurance on EMI

How Does Health Insurance on EMI Work?

Health insurance on EMI works by allowing policyholders to pay the premium of their mediclaim policy in equal monthly instalments over a period instead of in a lump sum. When a person opts for the EMI option, the insurer asks for their personal and financial information. This information is used to determine their eligibility for the EMI plan and fix the monthly instalment amount.

An agreement stating the terms & conditions of their EMI payments, i.e. the fixed monthly payment amount, the applicable interest (if any) and the EMI tenure, is created. Usually, the EMI period for a health insurance policy is 12 months, but it can vary from insurer to insurer. Besides, many insurers offer no-cost EMI for the convenience of the policyholder.

Why Buy Health Insurance on EMI?

Health insurance on EMI provides a convenient option to people who find it difficult to pay the premium in a lump sum. Here are some of the reasons why paying medical insurance premiums on monthly instalments is a good idea:

• With the EMI option, premium payment becomes more affordable and accessible to people, especially those living in small towns and rural areas.
• People find it more convenient to pay insurance premiums in instalments than to pay the entire amount in a lump sum.
• It helps people to better manage their finances, maintain a steady cash flow and avoid a financial burden due to upfront payment.
• Premiums on EMI can easily and safely be paid online on Policybazaar.com.
• It is possible to opt for auto-debit of premium on a specific date from the bank account to avoid missing out on any instalments.

Why Did IRDAI Introduce Buying Health Insurance on EMI?

The Insurance Regulatory and Development Authority of India (IRDAI) introduced the option of buying health insurance on EMI to make health insurance more accessible and affordable for all. Most people in India find paying the entire medical insurance premium upfront challenging and a financial burden. With the EMI option, people have to pay a small premium amount every month over a period of time to get financial protection against medical emergencies.

Paying health insurance premiums in EMI helps people manage their finances better and provides the flexibility to choose a payment option that suits their budget. Moreover, it has helped insurers to reach customers who were previously hesitant to buy medical insurance due to paying the entire premium in one go.

Benefits of Buying Health Insurance on EMI

Take a look at key benefits of buying health insurance on EMI:

1. More Affordable

   Paying medical insurance premiums on EMI over a period of time is much more affordable than paying the entire premium in a lump sum. This allows more people with a limited budget to buy a health cover without any financial burden.

2. Coverage for Expensive Medical Treatments

   With the advancement in medical technology and inflation, the cost of hospitalization and healthcare facilities have become quite expensive. With easy EMI premium payment, it will be easier to afford a health insurance policy that pays for the medical bills.

3. Access to Higher Coverage Plans

   With the flexibility to pay the mediclaim premiums in instalments, it becomes easier for people to buy a plan with a higher sum insured without worrying about paying the premium in one go. Doing so allows people to avail the best treatment without compromising on the treatment quality.

4. No-Cost or Zero EMI Options

   Several health insurance companies offer no-cost or zero EMI options, where no interest is charged on paying premiums on EMI.

5. Coverage for the Entire Family

   The EMI option allows people to secure medical coverage for their whole family without worrying about the premium. This is because they can easily pay a premium amount every month at their convenience and budget.

6. Easier to Afford Health Insurance for Senior Citizens

   Health insurance for senior citizens comes with a hefty premium that is difficult to afford for most elderly people with their limited pensions and income. With the option to pay the premium on EMI, senior citizens can afford to pay their medical insurance premium even with their limited monthly pension or income without any financial burden.

7. No Impact on Credit Score

   Paying medical insurance premiums on EMI has no impact on the credit score of the policyholder, provided the premium is paid on time.

8. Tax Savings

   Health insurance premiums paid in instalments are also eligible for tax benefits under Section 80D of the Income Tax Act of 1961.

Documents Required to Buy Health Insurance on EMI

The following documents may be required to buy health insurance on EMI:

• Duly filled proposal form
• Identity proof, such as an Aadhaar card, passport, driving licence, etc.
• Address proof, such as passport, Aadhaar card, etc.
• Income proof, such as bank statements or salary slips
• Recent medical records

Things to Consider Before Buying Health Insurance on EMI

Check out a few things that you must consider before buying health insurance on EMI:

• If a claim is filed within 6 months of buying the policy on EMI, the insurer may deduct the remaining instalment amount from the claim amount or ask for payment of pending instalments before paying the claim amount.
• Policyholders can change their mode of premium payment from EMI to lump sum or vice versa at the time of policy renewal.
• Some insurers can charge a slightly higher premium even by opting for no-cost EMI, as it may include the EMI processing fees.
• Policyholders must choose a monthly instalment amount and tenure that is manageable and aligns with their financial situation.
• Pay your monthly premium instalments on time to maintain a good credit score.
• Insurers may cut the free-look period from 30 days on choosing the EMI payment option.
• Make sure to read the EMI terms & conditions carefully to know exactly how does it work.

Difference Between Buying Health Insurance on EMI and Lump Sum Payment

Take a look at the key differences between buying health insurance on EMI and lump sum payment:

How to Choose the Right Health Insurance Policy on EMI?

Here are a few tips to choose the right health insurance policy on EMI:

• Assess your health needs by considering your lifestyle habits, family's medical history and future health goals
• Opt for a plan with a monthly instalment amount and EMI tenure that you can pay comfortably
• Look for a medical insurance plan that comes with no-cost or zero EMI
• Compare multiple health insurance plans to find a plan on EMI that sufficiently fulfils your healthcare needs without any financial burden
• Opt for an insurer with a good reputation and a good claim settlement ratio
• Read the policy terms and conditions carefully to know exactly what you are covered for

How to Calculate Premium for Health Insurance on EMI?

The premium of a health insurance policy on EMI is calculated based on several factors, such as age, sum insured, types of health insurance plan, city of residence, lifestyle habits, gender, etc. People can use a health insurance premium calculator online on websites like Policybazaar.com to determine the monthly premium for a policy. All that is required is the city of residence, family members to be covered, the age of the eldest member and the sum insured to view the premium for various mediclaim policies.