Can Health Insurance Premium Be Paid in Monthly, Quarterly, Half-Yearly and Annual Installments?

Until recently, health insurance premiums had to be paid annually. However, IRDAI (Insurance Regulatory and Development Authority of India) has given some relief to the health insurance policyholders as they are now allowed to pay premiums on a monthly, quarterly, or half-yearly, in addition to the current option of paying it annually. Until now, only premiums could be paid monthly, quarterly, half-yearly, or annually. Scroll to learn more about the benefits of paying premiums in installments. 

Why Choose Health Insurance with Premium Installment Payments?

The important key features of medical insurance premium installment payments are mentioned below:

1. Cost-Effective Coverage: Opting for monthly, quarterly, half-yearly, or annual premium installments provides affordable health insurance, allowing you to access extensive coverage without the burden of a lump-sum payment.
2. Convenient Payment Options: Enjoy the flexibility of choosing between monthly, quarterly, half-yearly, or annual premium payments to suit your convenience.
3. Financial Liquidity: By selecting installment payments, you can maintain higher financial liquidity, which is essential during crises. Safeguard your family's health while having the means to meet other expenses.
4. Tax Benefits: Health insurance premiums are eligible for tax deductions under Section 80D of the Income Tax Act, reducing your tax liability and saving money for other financial needs.
5. Budget-Friendly Premiums: Paying premiums in installments eases the financial strain compared to a one-time payment. This flexibility allows you to consider higher coverage and include more family members in your plan.

What Are the Problems of Purchasing Health Insurance through EMI?

There are also several downsides or disadvantages associated with obtaining health plan premiums through EMI payments:

1. Additional Premium: Monthly EMI payments for health insurance premiums may include an extra premium loading. This means policyholders might end up paying approximately 3 to 5 percent more than if they had paid the premium as a lump sum.
2. Waiting for Claims: Policyholders may not be eligible to make a claim under the policy until a certain number of installments have been paid, which differs from annual premiums where claims can be made immediately.
3. Higher Sum Insured Requirement: Many health insurance providers only offer the EMI option for policies with a sum insured higher than a specific amount, such as ₹5 lakh. Those opting for a lower sum insured may not be able to benefit from this payment option.
4. Missing Discounts: Policyholders who choose to pay their health insurance premiums on EMI may miss out on certain discounts available when the premium amount is paid in a single lump sum.

How to Select the Best Health Insurance Plan with EMI Payment Option?

Take the following factors into consideration when selecting a health insurance plan with EMI payment options:

• Zero-cost EMIs: A few insurance companies charge interest on providing EMI payment options. Make sure to invest in a health insurance plan that offers zero-cost EMIs, i.e., no additional fees or interest on instalment payments.
• Coverage and Benefits: Make sure the policy selected provides comprehensive coverage for you and your family members included in the plan even if the mode of payment is instalment payment.
• Review Policy terms: Check the terms and conditions of your policy in case of instalment payments. Confirm there is no impact on coverage if the instalment payment is missed any month.
• Cashless Hospitalisation: Check the insurer's track record, and if it offers cashless hospitalisation services in nearby network hospitals.
• Claim Process: Discuss with the insurer that instalment premium payments do not cause any delay or complications in the claim process.

Which Health Insurance Companies Allow Premium Payments in Instalments?

Some of the popular health insurance companies that support instalment premium payments, include:

1. Bajaj Allianz – All New Health Guard

The Health Guard Policy is one of the popular health plans offered by the Bajaj Allianz Health Insurance available for individuals at an affordable premium price. The plan comes with several benefits, including convalescence benefits, coverage for road ambulance, daycare treatment, in-patient hospitalisation treatment, etc. Any expenses that an individual incurs due to injury or during surgery are covered under this plan. But remember, the person must be 18 to 65 years old to buy the Health Guard Policy. For the dependent child, the entry age for this policy is 3 months to 30 years.

Purchasing this policy can be advantageous as it can save one from their financial burden during medical emergencies. In fact, the policy offers the option to make premium payments on a half-yearly, quarterly, monthly, and annual basis. You have the option to choose from the two variants available - Silver and Gold Plan with a sum insured ranging from 1.5 lac to 50 lac.

2. Future Generali – Health Total

Future Generali Health Total is another trusted health insurance policy that offers flexible premium payment options to its policyholders. Apart from the health coverage benefits, the plan provides discounts, tax benefits, and co-payment features. The comprehensive plan has three variants - vital, superior, and premiere. One can choose from any of the three variants and cover their health and families. Further, it offers cashless treatment benefits in 6000+ network hospitals.

3. Star Health Premier Insurance Policy

The comprehensive plan is offered by the Star Health Insurance designed for people 50 years and above covering outpatient medical expenses, pre-and post-hospitalization expenses, room rent, ambulance cover, etc. One can pay the premium amount for this policy on a quarterly or half-yearly basis as per their preference. Further, the plan offers several family and young age discount benefits, health check-up options, co-payment, etc.

Pros and Cons of Paying Health Insurance Premium in Instalments

Instalment premium payment options for health insurance plans can be highly beneficial for most policyholders. But, it also comes with a few disadvantages that one must prepare for in advance. Let's look at some pros and cons of instalment premium payments.

Pros

• Affordability: Paying the entire lump sum premium amount in one go can be difficult for policyholders. However, with the instalment payment option, policyholders can better distribute their premium amount on a monthly, quarterly, half-yearly, or annual basis. Thus, making it easier for people (especially people with low budgets) to manage their money and make premiums over a period of time.
• Convenience: There are a lot of things that an individual needs to keep in mind apart from health security. With the instalment premium payment method, the individual can manage their finances as per their convenience and simultaneously gain several health benefits.
• Tax Benefits: Under Section 80D of the Income Tax Act, any person who pays the premium for himself or family members is eligible for tax deductions, regardless of which payment method he/she chooses. In short, even if you decide to pay your premium in instalments, you can claim tax benefits and save money.
• Financial Liquidity: Instalment payments help individuals better manage their daily expenses and store cash in hand for other household emergencies.

Cons

• Additional Premium: One of the biggest drawbacks of instalment premium payments is they can increase the overall pricing of your policy. In short, the policyholder may end up paying an additional percentage than they would have paid in lump-sum.
• Waiting for Claim: In some cases, there is a certain instalment count that needs to be paid first to make a policy claim. However, in case of an annual premium, the policyholder can immediately make a claim.
• Limited coverage: In comparison to policies that demand a lump sum payment, certain health insurance plans that include instalment premium payment choices could provide less coverage. Hence, review the terms and conditions of the policies beforehand.
• Prepayment penalty: A few insurance plans come with prepayment penalty options, i.e., if you switch to lump sum payment before the instalment payment period ends, you may have to pay a penalty.

Additional Fees or Interest on Premium Instalments

Instalment premium payment option might be a convenient option for many but certain insurance companies charge an additional fee or interest to cover the administrative expenses of providing this flexibility. The additional fee may vary from insurer to insurer. Hence, make sure to clarify the interest rates and fee charges before applying for the instalment payment feature.

Tax Benefits on Health Insurance Premiums Paid in Instalments

Some people think that tax benefits cannot be claimed if you have chosen a flexible premium payment option for your policy. This is just a misconception; policyholders can claim tax deductions as per Section 80D of the Income Tax Act even if you pay a premium amount to the insurer in instalments.

In most cases, tax deductions up to ₹25,000 are available for people below 60 years of age. For senior citizens, the tax deduction comes around ₹50,000. No matter whether you choose to pay your premium amount in instalments or in a lump sum, you can avail of tax benefits.

Conclusion

Flexibility in health insurance premium payments is getting a lot of appreciation as it has made things much easier for policyholders. Insured individuals can conveniently pay the premium without stressing over the finances. They have the option to make payments on a monthly, quarterly, half-yearly, and annual basis as per their preference. However, one must be aware of interest and additional fees beforehand. Also, evaluate the tax benefits and other factors when selecting a Plan with an EMI payment option.

FAQs

Ques 1: Can I acquire health insurance for my family on EMI as well?

Ans: Yes, one can avail health insurance coverage benefits for family as well in case of EMI payments. Several health insurance providers provide flexibility in premium payments.

Ques 2: I have health insurance; is it possible to cancel it on EMI?

Ans: Yes, policyholders may be able to terminate an EMI-purchased health plan with certain insurers. You must seek a cancellation from the insurance directly in order to accomplish this.

Ques 3: Will my claim procedure be impacted if I change how often I pay my premiums?

Ans: No, the frequency of payments you select will not affect how claims are processed. No matter when you make your payments, your coverage is still in place.

Ques 4: Is there an option to pay health insurance premium amount on a monthly basis?

Ans: Yes, several insurance companies provide the option to pay premium amounts on a monthly, quarterly, half-yearly, or annual basis.

Ques 5: Is it possible to pay my health insurance premium on EMI using a credit card?

Ans: Yes, a lot of insurance companies accept credit card payments for health insurance premiums. In fact, some of these companies also provide EMI payment plans. It is best to learn about the EMI option from the credit card issuer and the insurer.