Why is It a Good Idea to Buy Health Insurance on EMIs?

As per the National Family Health Survey conducted by the Ministry of Health and Family Welfare, the health insurance coverage in India is poor, with only 29% of the households having at least one member covered under a health insurance scheme. The survey also states that only 20% of women in the 15-49 age group are covered under health insurance.One of the significant reasons for the low penetration of health insurance in India, as stated by the people who participated in the survey, is the premium is to be paid at once, and a large sum assured means a large premium, which makes health insurance unaffordable.Thus, to mitigate the issue, the IRDAI (Insurance Regulatory and Development Authority of India) has allowed a provision to buy health insurance on EMIs (Equated Monthly Instalments) , making health insurance affordable to all. This means when you buy a health insurance policy, you can pay the premium on EMIs every month, quarter, half-yearly or annually.

According to IRDAI, during the April to August quarter in 2021, nearly 11% of all medical insurance claims filed in India were COVID-19-related claims. Since the pandemic, many people are inclined to buy a health insurance policy online, and EMI premiums make it more comfortable for them to get health coverage.Let's discuss other reasons why buying health insurance on EMIs is a good idea-

Over the past decade, many youngsters are becoming vulnerable to various diseases like cancer, diabetes, kidney problems, etc. Experts suggest that the primary reason for this is the sedentary lifestyle that includes sitting in one place for several hours, increased work stress, unhealthy eating habits, erratic sleeping behaviour, excessive eating of junk food and minimal workout.In such a situation, having a health cover has become more important than ever. With the liberty to pay the premiums on EMIs, everyone can afford to buy a health insurance policy and get financial protection against the hospitalisation expenses for such illnesses, including COVID-19 infection.

As medical technology has advanced, new treatment techniques and drugs are invented, making several diseases and illnesses curable that posed a great risk to life previously. However, such treatments are often expensive, which increases the overall hospitalisation cost.With the ability to pay the premium in smaller instalments rather than at once, many people can afford to purchase a health insurance policy for themselves and their families and get cover against medical expenses. This also helps them provide high-quality medical care to their families without worrying about the cost.

As the health insurance on EMI gives you the flexibility to pay the premium on instalments, you can choose to purchase a policy with high coverage, i.e., sum assured. The premium payment may not be a burden. Moreover, you can get coverage for all your family members under a single policy, including the in-laws.It is better to purchase the policy at a young age when you are healthy, as the premiums for youngsters are generally lower than senior citizens for the same coverage.

With the insurance companies giving the option to pay the premium on EMIs, senior citizens need not compromise on their healthcare as they can now afford to pay the premium even with their limited income or pension.

Whether you choose to pay the health insurance premium on EMIs on a monthly, quarterly, or half-yearly basis, you can avail the tax benefits on the premium paid under Section 80D of the Indian Income Tax Act. You can enjoy tax benefits up to Rs. 25,000 in a financial year for a policy that covers you, your spouse, dependent children and parents (aged less than 60 years).

Overall premium cost

Typically, the basic premium cost does not change when you choose to pay the premium on EMIs. However, in some cases, depending on the insurance company and the type of insurance policy you choose, the premiums could be slightly higher.

Free look-in period

Today, all major insurance companies offer a free look-in facility for 15 days to all health insurance buyers. This means after you sign the documents and the policy becomes effective, you can withdraw or surrender the policy within 15 days without incurring any additional charges or penalties.Most insurance companies extend this facility to people who opt for paying the health insurance premiums on EMIs. The reason for policy surrender could be anything – you may not be happy with the insurance company’s services, you may find another policy from a different insurer that offers better coverage at a lower premium, or you may think you don’t need health insurance at all.

Changing the premium payment mode

Let us assume you have opted to pay the health insurance premium EMI every quarterly when buying the policy. You can change the premium payment mode to suit your needs during renewal. However, for the change in premium payment mode to take effect, you must clearly notify the insurance company about your intention to change the premium payment mode in the policy renewal form.

Filing a claim before paying the full premium

If you are paying the health insurance premium EMIs every month, and you need to file a claim within six months of paying the premium, then you can do so. The insurance company will process your claim request as usual after deducting the pending premium amount. In other words, if you want to file a claim before paying the full premium, then it will have no effect on the claim process.

The health insurance premiums on EMI facilities are welcomed by all policyholders; it makes health insurance affordable to all. Thus, if you don’t have health insurance yet, then it is high time you purchase one for your family and secure your finances against medical expenses during an emergency.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.