In case given the current uncertain climate owing to coronavirus pandemic, you too have got the push to buy a health insurance cover of a higher sum insured value, you may be in for a benefit. As IRDAI has now allowed provision of health insurance plans with an EMI option i.e. for lower liquidity you no more have to compromise on the higher coverage. But here are fine points that you need to know before you go for the product:
The facility further needs to be offered as a product by September 30, 2020
1. More premium cost with higher frequency in payment mode:
In case the premium mode is of a monthly tenure then the IRDAI has allowed insurers to ask for a higher premium, so for the insured monthly premium payment mode shall be an expensive mode. "On the same policy for a similar profile of a customer, monthly option will cost 3 per cent more than the yearly option. Quarterly and half-yearly will range between 2-2.5 per cent," says Anand Roy, MD, Star Health Insurance.
2. In case of policy period of over a year, annual premium decreases:
Note that if you opt for a policy period of more than a year, your annual premium decreases for each year given you pay the full premium for all policy years in one go. "The additional amount depends on the tenure of policy (1, 2 or 3 years) and the payment frequency opted by the customer (monthly, quarterly or half yearly) and may vary from 2 per cent to 9.5 per cent for our Care Advantage product," says Ajay Shah, Director & Head- Retail, Religare Health Insurance.
3. Hospitalisation after 3-installments payment
In case you get hospitalized after paying 3 EMIs towards the health coverage, your dues need to be still cleared. Also, for the rest of the premium value, either it shall be deducted from the sum insured value or the insured will need to pay that upfront. "In case of hospitalisation during the policy year, the outstanding instalments are deducted from the claim amount and then the claim is settled. Once the same is done, there is no need for the customer to pay future instalments until policy renewal," says Shah of Religare Health Insurance.
4. In the event the insured misses an installment towards health insurance :
For this advantage of being able to service health insurance premium in installments, you will be extra cautious as in case of non-payment of one installment, you will be given a grace period of just 7-15 days as against 1 month in case of life insurance. "If the insured fails to pay the premium within the 15 days of the relaxation period extended to the insured, the policy will lapse and he will lose the accumulated continuity benefit with respect to the waiting periods or cumulative bonus accrued," says Nandargi of Bajaj Allianz
Be mindful here that while payment of health insurance via credit card is also now a possibility now and if your credit card issuer is transparent on the charges then it shall still be a better choice than paying health insurance premium in installment both in respect of complexity and costs.