Health Insurance on EMIs! Why is it a Smart or Bad Idea?

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 basis.

Health insurance is extremely important, especially considering the rising medical inflation. It safeguards...

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Why is health insurance important?

What is the meaning of 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.

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How does health insurance on EMI work?

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 enrol 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.

Frequently asked questions

Following are some common questions about Health insurance plans on EMI.

Can I cancel my health insurance policy on EMI?

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.

Are there any tax benefits for health insurance on EMI?

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.

Is it possible to get health insurance on EMI for my family as well?

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.

Written by Roocha Kanande

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Reviewed by Rupinderjit Singh

I find the world of policies and premiums absolutely fascinating! Join me as I unravel health insurance with a dash of creativity and a fresh perspective.