Health insurance plays a crucial role in ensuring financial protection during medical emergencies by covering hospitalisation and treatment costs. However, paying the full premium amount at once can be challenging for many individuals. This is where health insurance on EMI offers an affordable solution. In this article, we’ll explain how health insurance on EMI works, its benefits and drawbacks, and how to select the best policy that suits your needs and budget.
How does health insurance on EMI work?
Health insurance on EMI means that you pay the insurance premium in equal monthly instalments over a specific period. Once the policyholder chooses to pay the premiums on EMI, the insurance provider and the policyholder work out an agreement which outlines the terms and conditions of the EMI payments. Under this agreement, the policyholder pays a fixed amount every month with a predetermined interest rate over a specified tenure.
Why should you buy health insurance on EMI?
Health insurance on EMI offers a flexible and convenient way for individuals who find it difficult to pay the entire premium at once. Here’s why paying your medical insurance premium in monthly instalments can be a smart choice:
- The EMI option makes premium payments more affordable and accessible, particularly for people in smaller towns and rural areas.
- Paying in instalments is more convenient than making a lump-sum payment.
- It allows better financial planning, helping maintain steady cash flow and avoid the strain of upfront payments.
- Premiums can be paid safely and easily online through Bajaj finserv.
- You can also set up auto-debit instructions to ensure timely premium payments and avoid missing any instalments.
Why did IRDAI introduce the EMI option for buying health insurance?
To make health insurance more accessible to the masses, IRDAI introduced the EMI (Equated Monthly Installment) option for buying health insurance policies. This payment option allows individuals to pay their health insurance premiums in installments over a specific period, making health insurance more affordable and accessible, especially for those who might find it challenging to pay the entire premiums upfront.
The EMI option has helped people budget their finances more efficiently by enabling them to manage health insurance payments in a way that suits their financial position. Additionally, offering health insurance policies on EMI has helped insurance providers to attract more customers by providing payment options that cater to diverse financial needs, enabling more people to benefit from financial protection against unexpected medical expenses.
Benefits of buying health insurance on EMI
Here are the major benefits of purchasing health insurance on EMI:
- More affordable premiums: Paying health insurance premiums in EMIs makes them more budget-friendly compared to lump-sum payments. This enables individuals with limited income to purchase adequate health coverage without financial strain.
- Coverage for high medical costs: With rising healthcare expenses due to inflation and advanced medical treatments, EMI-based premium payments make it easier to afford comprehensive health insurance that covers hospitalization and major medical procedures.
- Access to higher coverage plans: The flexibility to pay in instalments allows policyholders to opt for higher sum insured plans without worrying about the one-time premium cost. This is particularly beneficial when buying health insurance for parents, ensuring quality treatment without financial stress.
- No-cost or zero EMI options: Many insurers offer no-cost or zero-interest EMI options, allowing you to pay your premium in instalments without any additional charges.
- Family-wide coverage: The EMI option helps families get comprehensive health coverage without worrying about the premium amount. Paying smaller monthly instalments makes family floater plans easier to afford.
- Affordable for senior citizens: Senior citizen health insurance plans often come with high premiums. Paying in EMIs helps elderly individuals manage the cost comfortably within their monthly pension or income.
- No impact on credit score: Paying your insurance premium through EMIs does not affect your credit score as long as payments are made on time.
- Tax benefits: Premiums paid in instalments are eligible for tax deductions under Section 80D of the Income Tax Act, 1961, helping you save on taxes while staying protected.
By opting for health insurance on EMI, you can enjoy the benefits of a robust health plan without any financial burden. Always check with your insurer for specific EMI options and interest rates before making a decision.
Who is eligible for health insurance on EMI?
- Individuals above 18 years: Any adult policyholder can opt for EMI payment of health insurance premiums.
- Policyholders with a valid bank account or credit/debit card: EMI payments are usually linked to bank accounts or cards that support recurring payments.
- Residents of India: EMI options are available to Indian residents purchasing health insurance from domestic insurers.
- Eligible for selected plans: Not all health insurance plans offer EMI; check with the insurer if your chosen plan supports EMI payments.
- Timely premium payment history: Insurers may require the policyholder to have a good payment track record to avail EMI facility.
