The coronavirus pandemic has given us all an unpleasant reminder about diseases and life’s uncertainties. Health insurance is one of the crucial investment options in 2020 you should consider. Now, you can not only opt for a health cover online but also pay your health insurance premium in instalments.
The Insurance Regulatory and Development and Authority of India (IRDAI), as per a circular recently, had allowed all the general and standalone health insurance companies to provide policyholders with the option of paying annual health insurance premium in quarterly, monthly, and half-yearly instalments. The impact on business operations as a result of the lockdowns was huge. Employees across sectors had to face salary cuts, and many lost their jobs. Hence, it is an effort by IRDAI to offer relief to policyholders, considering the current scenario where many families are facing a financial crunch.
Here’s all you must know about paying medical insurance premium in instalments.
How Will Paying Premium in Instalments Help?
- Convenience for the policyholders: Many families with monthly income may find the option of a one-time payment of premium quite challenging. Hence, the new facility to pay the premium in instalments is a welcome move.
- Boosts affordability: The option of getting a health insurance cover by paying a premium in instalments is not only convenient, but it is also an affordable choice for the policyholders as there is no need to pay the premium as a lump sum. Further, the new facility will also draw more customers, that is, an advantage for a health insurer.
- Coverage: The new guideline is beneficial for those policyholders who would often face the problems of policy lapse due to non-payment of the premium as a result of a cash crunch. The new payment modes will ensure they will have no hassle in getting coverage under their health plans. Moreover, one can now afford a higher coverage which is crucial in present times.
- Relaxation Period: The policyholders will be entitled to a relaxation period, for paying premium to renew the policy, in the policies with instalment options. For instance, Care by Care Health Insurance (formerly Religare Health Insurance) allows a relaxation period of 15 days for each half-yearly or quarterly instalment and five days for each instalment on monthly basis.
The move will undoubtedly ease the process of paying the premium by policyholders. However, if a policyholder makes a health insurance claim before paying for all the instalments, then the payable balance amount will be deducted from the admissible claim amount that the insurer has to pay to the insured. Furthermore, this may not apply to claims arising under certain benefits. So, policyholders must read the policy documents carefully. Also, tenure discounts will not be available for an insured person if he or she has chosen premium payment on an instalment basis. In the case of the annual premium, there is no such hassle. So, policyholders can look at the pros and cons of paying health insurance premium in EMI mode and decide the option that suits them.
The premium of a health insurance plan will depend on various factors. When calculating the premium, one should also keep in mind the applicable GST rate which is 18%. Policyholders can use an online health insurance premium calculator to get an estimate of the premium amount they have to pay.
Plan for your family’s future; invest in health insurance. CHI offers customised health insurance policies to fulfil the healthcare needs of diverse customers. You can opt for the best health cover and pay your premium digitally.