Like life insurance policies which can be paid in monthly, quarterly, bi-yearly modes, soon you will be able to pay health insurance premiums similarly. This has come amid Covid 19 outbreak after IRDAI's call on the issue, when people have been facing liquidity crunch and might have otherwise not paid their premiums and let their policies lapse.
Who can pay health insurance premiums in installments?
This relief wherein health insurance premiums could be paid in installments is allowed or extended for all such policy holders whose policy have to be renewed latest by March 31, 2020. Earlier, the IRDAI issued similar guidelines via a circular with minor changes in September 2019.
By when will policyholders be able to pay health insurance premium in installments?
This facility shall be available as soon as the companies' IT infrastructure supports the move and can be offered as either a temporary or permanent facility
Facility Can Be A Lifeline In Such Uncertain Times
While for the employed lot the situation may or may not changed drastically due to Covid 19, self-employed people across fields might have bore a heavy brunt on account of this extended nationwide lockdown which spans close to some 40 days. And finances of all might have toppled, so this provision may help insured lot to keep their policies in place i.e. in force in insurance parlance.
Notably, for a person aged 40 year, a cover of Rs. 15 lakh could cost between Rs. 11000- Rs. 15,000 while for senior citizens, a cover of just Rs. 5 lakh could be as costly as Rs.25000- Rs. 40000 per year.
On the offer, there can be some changes in the basic premium
Herein on the facility, one can expect a marginal difference on the basic premium i.e. when the premium component is serviced in some modes i.e. monthly or likewise there could be a 5-10% difference when compared to the annual premium charges for health insurance.
And this call on premium loading and the quantum shall vary from insurer to insurer. Simply to state for annual health insurance premium of Rs. 12000, in the monthly mode you could be charged Rs. 1050, taking the total payout to be Rs. 12600 per annum.
The premium mode once chosen has to be adhered on to until the next renewal date.
Switch to the installment mode in health insurance premium only if you are facing cash crunch situation as the need of the hour with the outbreak of Covid 19 has made it all the more necessary that your health insurance policy provides with the cover if in case required.
Also, there can be claim settlement issues that can be faced with other payment modes as suggested by experts in the field. This is so because honouring claim in case of annual payment mode makes it easy for the insurer while in the case of other modes Every insurer will have to take a call on whether to adjust the balance premium instalments against the claim amount or not," says Sanjay Datta, Chief, Underwriting, Claims and Reinsurance, ICICI Lombard. Hence the call should be taken wisely.