Now, you may be able to pay health insurance premiums in installments

Imagine a facility wherein you could pay your health insurance premium similar to an EMI. A specific amount is deducted from your account every month as a premium for the health insurance policy. This will ensure that an adequate health cover is taken with a minimum pinch on the wallet.

A proposal has been sent to the Insurance Regulatory and Development Authority of India (IRDAI) to see if this structure of premium payment can be allowed under the current regime.

“We have sent a request to the regulator. Now, we will have to wait and see if this will be permitted,” said a senior official of a large private sector general insurance company.

A regular health insurance plan of Rs 25 lakh with a critical illness component for a 35-year old non-smoker would cost around Rs 25,000-30,000 per annum. If this is allowed through an installment option, an individual will be only required to pay Rs 2,100-2,500 per month for such a policy.

The IRDAI board is meeting on June 29 and this structure may also be discussed among several other issues like preference in treaties for foreign reinsurance company branches and the proposed acquisition of majority stake in IDBI Bank by Life Insurance Corporation of India (LIC).

In life insurance

Life insurance already has a monthly, quarterly and annual premium payment option. Further, there is also a single premium payment, as also the limited premium payment, option in the life insurance space. This makes it more affordable for the policyholders since they are able to pay the premiums as per their convenience and according to their financial conditions.

Health insurance premiums are on the rise for retail customers due to the increase in claims as well as due to the double-digit medical inflation. General insurance companies are of the view that incentivising the customers by giving them the flexibility of payment will motivate more individuals to buy a health cover.