Team AckoNov 17, 2023
Health insurance is extremely important, especially considering the rising medical inflation. It safeguards your finances and helps you get timely medical care. However, buying a suitable health insurance policy can be an issue for some due to the associated cost. In this case, one solution could be to buy health insurance on EMI (if the insurer allows it). In this article, we have weighed the pros & cons and explained if it is a good or a bad idea to buy health insurance on EMI.
EMI stands for Equated Monthly Instalment. It is a payment option that allows you to pay for a product or service in monthly instalments rather than paying the full amount upfront. The instalment amount is usually the same each month and is calculated based on the total cost of the product or service, the interest rate, and the repayment period.
EMI is often used as a financing option for big-ticket items such as cars, appliances, and home renovations. You can also use it for other expenses, such as health insurance premiums. By paying the cost of the product or service on EMI, you can spread the cost over time, making it more affordable and easier to manage your finances.
In India, health insurance policies that offer EMI payment options allow you to pay the premium for the policy in equal monthly instalments rather than in a single lump sum. The EMI payment period can vary depending on the policy, but it is typically 12 months.
To enroll in an EMI payment plan, you need to provide basic information, such as your name, contact details, and financial information. The insurance company will use this information to determine your EMI payment plan eligibility and calculate the EMI amount.
Once approved for an EMI payment plan, you will be required to make the monthly payments on time to maintain your coverage. The insurance company may also charge an interest rate on the unpaid balance of the premium, which will add to the policy's overall cost. It's important to carefully review the terms and conditions of the EMI payment plan before enrolling to understand the costs and potential penalties.
There are several advantages to buying health insurance on an EMI basis. Here are a few examples.
One of the main advantages of buying health insurance on EMI is that it allows you to spread the cost of the premium over a period of time, making it more affordable for you. This can be particularly useful if you have a limited budget or if the upfront cost of the premium is too high.
Buying health insurance on EMI is also convenient because you can pay the premium in small, manageable instalments rather than in a single lump sum. This can make it easier to budget for and manage your finances.
Some health insurance policies allow you to pay the premium on EMI for a certain period of time, after which you can switch to paying the premium in a lump sum. This can give you the flexibility to choose the payment option that works best for you at different stages of your life.
Paying the premium on EMI does not impact your credit score as long as you make the payments on time.
In India, you can claim tax benefits on the premiums you pay for health insurance, even via EMI.
A few potential disadvantages exist to buying health insurance on EMI in India. Here are a few examples.
One disadvantage of paying the premium on EMI is that it may result in a higher overall cost for the policy.
Some health insurance companies may require a credit check before approving an EMI payment plan. If you have a low credit score or a history of late payments, you may have difficulty getting approved for an EMI payment plan.
Some health insurance policies may have a prepayment penalty if you pay off the balance of the premium before the end of the payment period. This means that you could end up paying more in the long run if you decide to switch to a lump sum payment before the end of the EMI period.
Some health insurance policies that offer EMI payment options may have limited coverage compared to policies that require a lump sum payment. It's important to carefully review the policy terms and conditions to understand the coverage you are getting.
Paying the premium on EMI can add another layer of complexity to your finances. It's important to carefully track your payments and ensure that you make them on time to avoid any negative consequences.
Whether buying health insurance on EMI is a good idea or not depends on your circumstances and financial situation. Ultimately, the decision to buy health insurance on EMI should be based on careful consideration of your financial situation and insurance coverage needs.
Also read: Health insurance for family
Yes, some insurers may allow policyholders to cancel a health plan purchased on EMI. To do so, you must contact the insurer directly and request a cancellation. If applicable, you may be asked to pay any outstanding premiums or fees that are due at the time of cancellation, along with the cancellation fee.
Yes, in India, tax benefits are available for health insurance premiums that are paid on an EMI basis. Under section 80D of the Income Tax Act, 1961, you can claim a deduction for the premiums paid for a health insurance policy for yourself, your spouse, children, and parents.
Yes, it is generally possible to get health insurance coverage for your family on an EMI basis. Many health insurance providers offer flexible payment options, including paying premiums on an EMI basis, to make it easier for individuals and families to afford health insurance coverage.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
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