Insurance Premiums In EMI

Do More Buyers Prefer Paying Insurance Premiums In EMI?

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Insurers across the board are witnessing a rapid increase in the demand for health cover(s), which is paid for by using Equated Monthly Installments or EMIs, for short. The top health insurance companies have chalked this out to the fact that there has been a drastic fall in the amount of money that individuals can afford to spend, especially in this time of job terminations, salary depreciation, etc., resulting from the ongoing global pandemic.

The Impact of COVID-19

The Insurance Regulatory and Development Authority of India, better known as the IRDAI, has allowed insurance companies to make policies available that come with monthly, quarterly, or yearly modes of payment. Once the outbreak of the Coronavirus took place, the IRDAI directed all the top health insurance companies to offer this facility to all old and new buyers of health insurance. As a result, this is a feature that can now be availed from all health insurance companies. The average amount of insurance premiums that need to be paid each year for health cover(s) ranges between ₹7,000 to ₹1,00,000. EMIs make life a lot easier and one can pay these large amounts conveniently. Hence, there has been a lot more adoption of monthly EMIs when individuals buy health insurance online or other, in recent times. COVID-19 has resulted in revenue loss and issues in cash flow for the self-employed while leading to job losses and pay cuts for the salaried population.

Why Do Individuals Tend to Prefer Paying Health Insurance Premiums EMI’s?

From the month of April to August 2020, 11% of all the claims of medical insurance were made by people who had contracted COVID-19. As there is an increasing percentage of the population that is reverting to buying health insurance online in India, paying the insurance premiums over EMIs, makes it easier for everyone to purchase an insurance policy for themselves and/or their family, including  Insurance with COVID-19 cover.

The following are the most important factors why individuals find it preferable to pay for health insurance premiums through EMIs :

Rise in Health-Related Problems

A sedentary lifestyle, coupled with unhealthy food diets, has turned into an extremely common occurrence in the present day. The sedentary lifestyle has actually taken a rise even more so after the lockdown(s) because of the Coronavirus leading to a significant rise in lifestyle diseases and critical illnesses, including cancer, cardiovascular-ailments, kidney failure, diabetes, etc. All of these have led to health expenses increasing on an average for everyone, making the cost of insurance premiums seem like an additional burden. Fortunately, even paying for health insurance policies in EMIs can get you the cover that you require for the hospitalization charges quite affordably and can even get you Insurance with COVID-19 cover.

Expensive Medical Treatments

Technology keeps on evolving around us all the time and all the major advancements in the field of medicine and medical technology mean there are now a lot of new treatments which have become the norm but are very expensive. Rising costs have also pushed up the costs for hospitalization and buying medicines. That is why having to pay for the coverage in small manageable installments allows everyone to have a shot at having the best health insurance plan(s), irrespective of their financial problems.

Opt for Higher Coverage Amount

Once the payments get broken down into manageable installments to be met each month, it offers the policyholder a lot of flexibility with the insurance premiums. It is far easier for the applicants to pay for the policies with higher coverage amounts, since they do not need to come up with the huge premium amount, all at once. That allows them to not have to compromise on the level of treatment and health benefits, even though they only need to come up with reasonable amounts. The insurance premiums to be paid for young applicants are always lesser when put in comparison to the ones senior citizens have to pay.

Coverage for Self and Family

Medical Issues can crop up at any time without any prior notice, becoming a sudden financial burden on you. Equated Monthly Installments allow you access to all the necessary health benefits that keep you and your family covered medically, without putting the huge financial burden of the lump sum premium amount(s). The insurance premiums can be paid each month, or every quarter or even twice each year, based on what is convenient for you and your budget.

Easier to Buy Health Insurance for Senior Citizens

The premium amounts that you need to pay for senior citizens are always higher than those for younger applicants with the option of being able to pay parts of the premium amount(s) every month, elderly people no longer have to make any compromises on their health. EMIs allow them to pay for even the best health insurance plan(s) with their limited monthly incomes or pension, and not get too financially burdened. 

Tax Exemption Benefits

While not a reason for switching to EMIs but paying in this mode doesn’t affect the eligibility for tax benefits under section 80D of the Income Tax Act of 1961.

Equated Monthly Installments have become arguably the most preferred mode of payment for health insurance premiums, even the comprehensive family floater health plan(s). The cost is divided into a broader time spectrum and thus, smaller sums and a host of other benefits make EMIs a smart choice for anyone. In fact, with the popularity of subscription services increasing by the day, many Insuretech companies like Vital offer this model for their health covers. This actually improves the convenience of paying and introduces people to a pay-as-you-go model. Not only that, considering their health covers offer a ton of benefits – right from free doctor consults to fitness classes and more – it becomes easier to pay for comprehensive coverage without affecting your budget.

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