Payment of Health Insurance in installments
To offer relief to the policy owners, the IRDAI (Insurance Regulatory Development Authority of India) has allowed the health insurers to accept payments in the form of monthly installments insurance premiums. This regulatory change by the insurance body is a welcome move for all the policyholders.
Why Has the Provision been Introduced?
The main purpose of introducing this regulatory move was to make health insurance an affordable product among the masses. So, the people who were unable to pay lump sums earlier may now be able to afford medical insurance.
Pros of Paying Monthly Installments for Health Insurance Policy-
- Accessibility of the health insurance product got enhanced in small towns and rural areas of the country.
- With the advent of the internet, making payments online has also become easier. So, paying premium installments is not anymore, a cumbersome job for people.
- With premium installments, people can now opt for different policies or change it in the future, when they can afford a higher sum assured.
- People who have not covered themselves against any health plan will now be able to purchase a policy and can easily pay the premium of their policy without affecting their existing budget.
What Could Go Wrong When Paying Monthly Installments for Health Insurance Policy?
Though there are many benefits of paying your health policy premiums in the form of monthly installments, still policyholders need to be aware of what they are getting into-
- The policyholders need to understand that paying their policy in installments will make its actual cost much higher. The policyholder in such cases may end up paying approximately 3% to 5% more which is a huge amount if you consider the sum assured. The quarterly premium rates will be around 3% higher while the monthly premiums will make the product 5% more expensive.
- Also, people will have to opt for insurance for the term of 2 to 3 years.
- Moreover, people cannot claim insurance money before a year of making a premium payment. This was not the case with annual premiums being paid earlier.
So, if you have insured yourself and family against any health plan and are unable to pay its premium. You can take the benefit of this move introduced by the IRDA (Insurance Regulatory Development Authority of India) to keep your policy in force. Make sure you also consider its pros and cons well before finalizing your decision.