Health insurance is one of the best financial protection covers for people and their families. In the absence of any idea when a medical emergency will strike, skyrocketing medical costs provide peace of mind with health insurance. But due to financial constraints, many people find it difficult to pay the health insurance premium in a lump sum. To cater to this need, many insurers have come forward with the opportunity of paying health insurance premiums in EMIs or Equated Monthly Installments.
Paying health insurance premiums through EMIs allows a policyholder to spread the cost of their policy over time, making it less financially burdensome. Here are the many benefits of paying health insurance premiums in EMIs and why for many policyholders it could be an advantageous option.
- Affordability and Financial Flexibility
The main advantage of Health Insurance on EMI payments is that they are extremely affordable and flexible in terms of one’s wallet. Health insurance premiums, especially those providing comprehensive policies or family floater plans, are high, especially when opting for a high sum-insured plan or add-on covers such as critical illness or maternity benefits.
These premiums have to be paid in one instalment, and during certain months, one’s expenses tend to be high. So, if one chooses EMIs, that burden could be spread out into smaller portions that could be directly paid, making it easier to manage without having to compromise your health care.
For instance, if the annual premium for a health insurance policy is ₹24,000, paying it upfront could look expensive. But the same ₹2,000 would cost over 12 months, ensuring that the burden is spread over the interval.
- No Need for Compromising on Coverage
Often, a coverage plan is opted for by the individual at a low coverage to minimize the premium amount, as he or she may not have much savings for a lump sum. This is no longer the case due to the EMIs on payment of premiums.
Choose the EMI facility – Now, a policyholder can pick up a more versatile coverage with higher sum assured and comprehensive benefits comprising benefits like pre-existing disease coverage, critical illness riders, etc. without worrying about upfront costs. This will result in better protection against medical emergencies and increasing health care costs.
- Better Management of Cash Flow
The liquidity of a policyholder can be improved by paying health insurance premiums in EMIs. Cash flow problems are likely to be caused by an enormous one-time premium payment, especially if unanticipated expenses occur, for example, home repairs or educational costs.
EMI payments let policyholders budget their money differently. The premium is split into smaller installments, which does not affect the monthly budgets much. Policyholders can budget their finances better because they are guaranteed to meet health insurance and other financial commitments without straining their finances much.
- No Interest or Hidden Charges in Many Plans
The health insurance provider usually offers EMI payment options without adding any interest or hidden charges in most cases. This makes it a very cost-effective option. This is a huge benefit since, normally, under traditional credit-based EMI systems (like loans or credit card repayments), the consumer incurs interest on the amount.
With health insurance premium, most insurance companies allow you to make the payments monthly with no extra cost to you. You therefore enjoy having the benefits of health coverage without having to put any extra money in terms of interest or fees.
- Increased Convenience and Ease of Payment
EMIs can be done in health insurance premiums using various convenient methods, such as direct bank debits, UPI payments, or digital payment apps. This removes the hassle of having to remember to make one large payment every year and provides a streamlined process for managing premiums.
Many insurers also have an automatic renewal facility of the policies, which once opted for the EMI option, your insurer will automatically deduct the premium amount from your account every month so that there is no break in your coverage. This setup avoids chances of missing payments and keeps you covered throughout.
- Better Financial Planning and Budgeting
Health insurance premiums often constitute a significant portion of an individual’s annual expenditure. By paying in monthly installments, individuals can easily budget for their premiums alongside other monthly expenditures, including rent, groceries, and utilities.
In addition, splitting the payments over a year or even more allows one to factor in their finances better. They may be assured of having sufficient funds each month to settle the premium, thus minimizing the stress caused by big and sporadic payments.
Example: A policyholder can plan for monthly expenses by including the ₹2,000 EMI in their usual monthly budget. Then the payment of the premium does not feel like an unexpected expense, and it is factored into the usual spending.
- Better Cash Reserve Management
Also, being able to pay health insurance premiums through EMIs allows policyholders to keep a healthy cash reserve. Instead of wiping out their savings in one premium payment, individuals can now have their cash reserve intact while yet keeping an active coverage.
This becomes especially valuable during recessions, in which it helps ensure having an emergency cash reserve ready to face surprise events like medical emergencies, job loss, or financial difficulties. This avoids depleting savings for the annual premium to be paid at the beginning of each year.
- Inclusion in the Reach for a Larger Population
Payment options under EMI can contribute to deeper financial inclusion as more people can afford health insurance, especially those who do not have the means for the payment of premiums required upfront.
The option of spreading out premium payments over several months is indeed a viable lifeline for people in lower income brackets or those living from paycheck to paycheck, making health insurance more affordable and accessible. Thus, the EMI option empowers more people to access necessary health coverage and further promotes financial security and access to healthcare.
- Impact on Family Plans and Group Policies
The premium of a family floater plan is quite high, as it will cover multiple family members under one policy itself, and this might be a significant expense for a policyholder. Payment in installments, thereby making the EMI payability, would make it even more feasible to bear these premiums.
EMIs also offer more convenience for employer-sponsored group policies, when policies frequently cover the entire family of the employee. They are thus able to continue health insurance coverage for their families without having to pay too large a premium amount at one time. This comfort helps to keep adequate health cover available for the loved ones while expensing monthly costs much better.
- Simpler Policy Upsize
EMI options can also offer more flexibility if you want to upgrade your health insurance policy. As your healthcare needs shift, you might feel that the existing policy does not cover your emerging requirements, especially when you are adding more family members or if your medical needs change.
Instead of trying to service a more significant lump-sum premium for better coverage, it is possible to switch to a more comprehensive policy by paying for it in EMIs. That way, if you want to upgrade to a better plan without the immediate challenge of having to pay at once, you can afford to do so.
Paying health insurance premiums in EMIs throws open the important advantages it brings, making health insurance more accessible, affordable, and manageable for individuals and families. That they can be split into monthly installments from the annual premium will help an individual better manage his finances, avoid financial strain, and ensure continuous health coverage.
Additionally, payment through EMIs provides the insured individual with a more detailed cover, saves his cash balances, and gives him a high degree of flexibility in managing his overall financial well-being. EMI helps such people pay health insurance premiums who do not have the money to pay high amounts at one time, so they get protection in case of a medical emergency.
Before choosing the EMI payment option, it is important to carefully evaluate the terms and conditions of the insurance policy and ensure that the insurer does not charge any hidden fees or interest. By making an informed decision, individuals can benefit from both comprehensive health coverage and financial peace of mind.
Disclaimer: This is a paid advertorial
