Why Buy Health Insurance on EMI?
These days, health insurance is no more underrated as people have understood its importance and benefits. But very often, people are reluctant in purchasing health insurance due to its cost. Those who are salaried or earn fixed incomes struggle to pay the annual premium in a lump sum. Thus, to make health insurance more affordable, in 2019, the Insurance Regulatory and Development Authority of India (IRDAI) introduced health insurance on EMI for Indian families. The regulatory board asked health insurance providers to embrace policyholders with the option of paying annual health insurance premiums on EMIs. Nowadays, insurers can pay health insurance on monthly EMI/quarterly or half-yearly according to their convenience. Let’s understand the importance of health insurance on EMI with Vivek’s example.
Vivek works with a private organization as a marketing executive. Vivek gets a fixed salary every month from his company. Being an elder son, Vivek has some responsibilities for his parents. Vivek wanted to purchase a health insurance policy for his parents so that they can stay protected against various diseases. But earlier he couldn’t afford the annual premium of health insurance as his salary is limited. When the health insurance EMI option was introduced in 2019, Vivek purchased a health insurance policy for his parents as most health insurers offer EMI options to make health insurance more accessible and affordable.
6 Advantages of Health insurance with EMI facility
Let’s take a look at some of the advantages of health insurance with the EMI option.
- Better Convenience: The popularity of health insurance with EMI options is increasing day by day as it is more convenient for people who depend on a monthly income. Moreover, now, you can pay your insurance premiums online without any hassle. Both of these features have made health insurance more popular and available to people in rural areas.
- Helps to Deal with Rising Healthcare Costs: Nowadays, healthcare costs are rising exponentially. So, health insurance is necessary for all and supports families against these growing medical expenses. If you are looking for a higher sum insured amount, your premiums will also be on the higher side. With health insurance on EMIs, this becomes affordable for many. So, health insurance EMIs are the best options to deal with these rising expenses.
- More Affordability: People who are salaried employees or earn a limited amount may find it challenging in paying the premium amount at a time. When they get an option for flexible premium payment through EMIs on a monthly, quarterly, or half-yearly basis, they can afford their health insurance policies. These people also stay protected against various diseases and don’t need to compromise on the quality of the treatment for their illnesses.
- Beneficial for Senior Citizens: Senior citizens are more susceptible to illnesses and risks, and thus, they need to pay higher premiums for their health insurance. Moreover, their monthly earnings are also limited. Thus, with health insurance on EMI, they can also purchase an all-inclusive health insurance policy and get the best medical treatments against their diseases. To manage their health, they don’t need to burn their savings.
- Choose a Higher Coverage: Health insurance policies that offer higher coverage are costlier. Many policyholders prefer a health policy with wider coverage or a higher sum insured amount, but they hardly afford the premium amount at a time. With EMI payments, they can adopt a policy with higher coverage without making the payment at a time.
- Get Tax Benefits: If you pay your health insurance premiums through EMIs, you can still enjoy the tax benefits as per Section 80D of the Income Tax Act. According to your health insurance premiums, you can claim deductions on your income tax.
5 Disadvantages of Purchasing Health Insurance on EMI
There are some disadvantages of buying health insurance on an EMI basis.
- Extra Premium: When you are making monthly EMI payments for your health insurance, you need to pay an extra premium amount. You may end up paying nearly 3 to 5 per cent more than if you had paid as a lump sum.
- Waiting for Claims: In the case of EMIs, you may not initiate a claim under the policy until you pay the premiums for certain installments. If you are paying the premium amount at a time, you don’t need to face this situation.
- A Higher Sum Insured May Be Required: Many health insurance companies offer an EMI option if you choose a higher sum insured amount, for example, an SI of Rs.5 lakh. People who opt for a lesser sum insured amount, may not get this benefit.
- No Discounts: Policyholders who opt for the health insurance EMI option may not get certain discounts which they easily get if the premium amount is paid in a lump sum.
How to Select the Right Health Insurance Policy On EMI?
These days, many health insurance companies are offering EMI options to their customers. Thus, it could be an arduous job for a policyholder to choose the best health insurance policy. Certain factors you should check before opting for a health insurance policy on EMI.
- Prefer a health insurance policy that has no cost EMI. This means there will be no add-on costs when compared to a single annual premium
- Check whether the policy offers coverage for all your healthcare needs or not
- Also, check the number of people is getting covered under your health insurance policy
- Go through the insurance policy terms and conditions before making any commitment.
- Ensure that the health insurance company offers cashless hospitalization and has a dedicated customer service department
The newly introduced health insurance EMI option has been welcomed and applauded by all the policyholders in India. Now, health insurance has become affordable for many including the lower-income group. After this inclusion, many people are purchasing health insurance to safeguard their health against various diseases.