In the current Coronavirus pandemic, having a health insurance policy has become a must. As the number of positive cases is increasing every passing day, more and more individuals are prone to contracting the virus. Hospitalisation due to Coronavirus can incur considerable medical costs and so a health insurance policy has become the need of the hour.
Though the importance of health insurance is being felt among many, paying the premium for the policy is challenging for many when COVID has had such a negative economic impact. Job cuts, pay cuts and uncertainty in business are some of the major economic impacts of the pandemic. In these situations, affording health insurance premiums can be a challenge. Keeping this in mind, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced the concept of instalment premiums in health insurance. Do you know what the concept means?
Paying health insurance premiums in instalments
The insurance regulator, IRDAI, has allowed health insurance premium payments in instalments. While life insurance premium payments are allowed to be paid monthly, quarterly, half-yearly or annually, the same facility is now being offered under health insurance plans. Thus, you can pay your health insurance premiums monthly, quarterly or half-yearly rather than in lump sum.
What it means for you?
Here are some of the benefits which you can avail from this facility of instalment premiums in your health insurance plan –
- Affordable premium
The main idea behind the introduction of instalment premiums was to make health insurance affordable for you. Thus, in current times when health insurance is a must, you can easily buy the policy and afford the coverage by paying premiums in instalments.
- Possibility to avail higher coverage
An optimal sum insured is a must to meet the expensive medical costs which incur in a medical emergency. Now, with the benefit of instalment premiums, you can easily afford a high coverage level in your health insurance policy. A high coverage level would cover your medical expenses sufficiently and protect your savings thereby giving you financial relief.
What is means for insurance companies?
As health insurance policies become affordable for many, health insurers can expect an increase in the demand of their products. This would increase their premium collection and boost their revenues. Moreover, the facility of instalment premium would boost the popularity of health plans making it profitable for health insurance companies.
What it means for the insurance sector?
The introduction of instalment premiums is a major boost for the insurance segment as a whole. As health insurance plans become popular, insurance penetration is expected to increase. Moreover, as high coverage levels become affordable, the insurance industry would grow on the increased premium that they can earn.
A few things to check!
Though paying premiums in instalments is good news for you, here are some aspects of such facility which you should know –
- Some companies might put loading on monthly or quarterly premiums and offer discounts in annual premiums. For instance, if the annual premium for a policy is INR 10,000, you might have to pay INR 900 every month if you choose the monthly mode of premium. Alternatively, if the annual premium is INR 12,000 and the monthly premium is INR 1000, you might enjoy a discount if you choose to pay the premium annually.
- If you are paying premiums in instalments and there is a claim before the full premium payment has been done, there would be two choices. One, you would have to clear the outstanding premium before the insurance company settles the claim. Two, you do not pay the outstanding premium and the insurance company deducts the premium from the claim amount. For instance, if you are paying a monthly premium of INR 900 and there is a claim in the 6th month, you can either pay INR 5400 and receive the full claim amount, or the insurance company would deduct INR 5400 from the claim amount payable.
- The facility of instalment premium is being offered in the current situation when the pandemic has caused economic disturbances. The facility might be continued in future or it might even stop depending on the insurance company’s practices.
EMI payments have always found favour with customers who can make big purchases and then pay for them in small and affordable investments. The facility of instalment premiums is, therefore, beneficial for you as you can afford a higher coverage and invest in a comprehensive health insurance plan. So, choose this facility and opt for an optimal sum insured. If, however, you can pay the premium in one lump sum, you can also opt for annual premium. So, assess the suitability and make a choice but do invest in health insurance for financial security in these times of crisis.