For many people, a major obstacle when considering a health insurance plan is the high upfront premium cost. This financial challenge often relegates health insurance to a lower priority on their list of regular expenses. The good news is that now several insurers offer the choice of paying the premium in installments, which can be helpful in case of budget constraints.
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“In India, there is a section of customers, who understand the benefits of health insurance and are willing to take up one to protect themselves and their families from medical exigencies. However, their plans are deterred due to the cost they need to incur for paying the health insurance premium at one go, thus making health insurance go down in the priority list of their regular livelihood expenses. Instalment option to pay the health insurance premium is targeted to such customers, who don’t have to postpone their plans of taking up a health insurance for lack of funds,” said Parthanil Ghosh, the President of Retail Business at HDFC ERGO General Insurance. Generally, policies offers instalment option in half yearly, quarterly, and monthly modes without any additional interest charges.
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Though the demand for EMI payment has been increasing, health insurance premium in instalments is a relatively new concept. “Since its launch during October 2022, we have seen 30 per cent of our online customers of Optima Secure opting for instalment option,” said Ghosh.
It’s important to note that the installment option provided by an insurer differs from the payment installment alternative that you might select using a credit card or other third-party payment system to pay your health insurance premium. In the case of the latter, the insurer’s premium payment mode is essentially annual, and it’s the third-party payment platforms that remit the payment to the insurer on the customer’s behalf. Subsequently, these platforms retrieve the payment from their customers in equal installments, accompanied by additional interest charges.
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But an important question remains: what happens in the case of a claim? How will the remaining instalments be paid in case of a claim? If there is any claim before the end of premium instalment, the customers can opt for the claim through regular process either in cashless or reimbursement mode. However, the balance instalment amount, which is due for payment towards the policy during the year, gets deducted from the total claim pay-out.
What happens in case of late payment? Generally there is a grace period of 15-30 days depending on the frequency of payment which you should check with your insurer to avoid your policy getting lapsed and losing all continual benefits. Ghosh cleared for HDFC ERGO Optima secure, we allow a grace period of 15 days for monthly instalments and 30 days for quarterly and half-yearly instalment. In case the policy holder fails to pay instalments even within the allowed grace periods, procedure toward the cancellation of the policy gets initiated.
