Policyholders prefer paying health insurance premium in EMIs amid Covid outbreak: Survey
Here is a primer on how health insurance premium is paid in instalments and how the claim settlement process works
Rising healthcare costs with high Covid-19 treatment costs, particularly at private hospitals, have changed India’s attitude towards health insurance. Now more people want to buy a bigger cover and as a result, there has been a growing preference among policyholders to pay the health insurance premium in instalment. According to a survey done by PolicyBazaar, the feature has become the preferred payment option for 40% of its customers. The key finding of the survey also marked an improvement in the overall sum insured with average cover doubled to Rs22.42 lakh in FY’21 against Rs 11.4 lakh in FY’20. The survey indicates a sharp increase in awareness and demand for high cover protection policies.
Given the financial stress due to job losses and pay cuts when many people were going through a cash crunch situation the Insurance Regulatory and Development Authority of India (Irdai) last year allowed the payment of health insurance premiums in instalments. The move helped in ensuring that EMI based options become available to customers from all insurers. Earlier the facility to pay in instalments was given by a few insurers. Here is a primer on how health insurance premium is paid in instalments and how the claim settlement process works.
How do you pay the premium in instalments?
Following the direction by IRDAI, insurers now give you the option to pay a premium on a monthly, quarterly or half-yearly basis in addition to the earlier option of paying premiums on an annual basis. For instance: if your annual premium works out to Rs 24,000, you can change it in instalments and pay just Rs 2,000 every month for the next 12 months. For every instalment paid by you, the insurance company sends you the receipt.
What happens if you miss the premium instalment?
You generally get a grace period of 15 days for paying the premium. If it is not paid even during the grace period, then the policy may be considered as lapsed and the policyholder loses its benefits. It is, therefore, advisable to renew your policies before the due date as it can affect your continuity benefits.
What happens if you claim in between?
In case of a claim, you will have to pay the entire balance premium upfront or it gets deducted from your claim amount. Since an insurance company can deduct the balance premium amount from your claim amount it doesn’t affect the claim settlement process.