Is it a Good Idea to Buy Health Insurance on EMI?

Source: insurancedekho.com

The importance of health insurance cannot be overstated. But, many people might not consider buying health insurance, and one of the main reasons for this is the cost. Those who rely on monthly or fixed incomes may find it difficult to pay the annual premium in a lump sum.

So, to increase the affordability of health insurance for Indians, in 2019 the Insurance Regulatory and Development Authority of India (IRDAI) asked health insurance companies to provide policyholders with the option of paying annual health insurance premiums on EMIs. Thus, it is possible to pay a fixed amount in quarterly, monthly and half-yearly instalments towards a health insurance policy.

There are many advantages that come with being able to pay health insurance premiums on a monthly basis:

1. Greater Convenience

The option to pay health insurance premiums in the form of EMIs makes it more convenient for a lot of people who rely on a monthly income. Additionally, the ease of making payments online makes it a hassle-free experience. Both of these features have also helped make health insurance more accessible to people in rural areas.

2. Deal With Increasing Medical Costs

These days, with the increasing medical costs, it is necessary to have health insurance for financially support in covering healthcare expenses. This means that it is important to get a higher sum insured in health insurance amount, that can result in a higher premium. And with the option to pay health insurance on EMIs, this becomes more manageable for many, and thus allows them to deal with these rising expenses.

3. More Affordability

People who rely on a monthly income may find making a lump sum payment for their premium quite challenging. Thus, when they are able to choose a more flexible premium payment through EMIs on a monthly, quarterly, or half-yearly basis, they can have easier access to more affordable health insurance coverage, and not have to compromise on the quality of the treatment.

4. Beneficial for Senior Citizens

Senior citizens are more vulnerable to health risks, and thus face higher premiums for their health insurance. Additionally, seniors might also have a limited monthly income. Thus, with the availability of health insurance on EMI, they can now avail themselves of an essential health insurance policy, and get medical treatments without having to worry about managing their savings.

5. Choose a Higher Coverage

There are many policyholders who would prefer to have a wider coverage, or a higher sum insured amount, but could not afford the higher premium costs as a single payment. But, with monthly EMI payments, they can now opt for higher coverage without having to make the payment all at once.

6. Get Tax Benefits

Even when one pays their health insurance premiums through EMIs, they are still eligible for tax benefits as per Section 80D of the Income Tax Act. They can claim deductions on their income tax as per the premium paid towards insurance.

Check: Health Insurance Tax Benefits

There are also a few cons or disadvantages about getting health insurance on EMIs that cannot be ignored:

• Extra Premium – In many cases, monthly EMI payments for health insurance premiums may come with extra loading on premium. For example, they might end up paying about 3 to 5 percent more than if that had paid it as a lump sum.
• Waiting for Claims – Policyholders might also not be able to make a claim under the policy until a certain number of instalments have been paid, which is not the case with annual premiums.
• Higher SI May Be Required – Many health insurance companies only offer the EMI option if sum insured higher than a specific amount, for example, an SI of ₹5 lakh, and those who opt for a lesser sum insured may not be able to avail this benefit.
• Missing Out on Discounts – Policyholders who pay their health insurance premiums on EMI may also miss out on certain discounts offered when the premium amount is paid in lump sum.

With so many different health insurance plans out there offering EMIs’ it can be difficult to know which one to choose. There are some factors to look out for, such as:

• Look for a health insurance that has no cost EMI, meaning there are no additional costs when compared to a single annual premium.
• Ensure the policy provides coverage for your healthcare needs and the number of people you’re covering in your health insurance policy.
• Check for what is excluded in your health insurance policy by reading through the terms and conditions.
• Make sure the insurer provides cashless hospitalization, and has a reputable customer service record.

Conclusion

In a country like India, where the affordability of health insurance is an issue, the option to take monthly EMIs is a great benefit. It can allow people to get comprehensive healthcare coverage even when those policies were originally out of their reach.

Thus, as long as you do not overlook the cons of buying health insurance on EMI, it can be an excellent and affordable way to keep yourself and your family protected from rising medical expenses.