Now Pay Health Premium in Monthly, Quarterly, and Half-Yearly Instalments
Updated On Feb 11, 2021
If the yearly payment of entire premium in a lump sum is what had kept you away from purchasing a health insurance plan till yet, then the Insurance Development and Regulatory Authority of India (IRDAI) has brought you some relief. The good news is that soon you will be able to pay the premium on a monthly, quarterly, and half-yearly basis besides the current practice of paying annually.
As circulated by IRDAI, the general and standalone health insurers are now allowed to collect premiums in instalments which were paid annually until now. The circular says, “The premium mode (frequency) proposed to be added may be monthly, quarterly or half-yearly and the resulting premium amounts under each mode (frequency) are consistent with premium amounts under other premium modes (frequencies) of the underlying product.”
IRDAI has also permitted the insurance providers to make slight modifications in the individual insurance products already approved by it on the basis of certification without waiting for further approval. These modifications include an increase in the number of distribution channels, changes in the rate of base premiums (not more than 15% of the annual premium rates be it negative or positive), and decrease in minimum age or increase in maximum age, and increase or decrease in minimum premium.
As per the circular, “The proposed increase is allowed subject to ‘actual loss to expected loss’ ratio exceeding 130% in each of the preceding three full financial years." The Head of Retail Health, Personal Accident and Travel underwriting in Bajaj Allianz General Insurance Co. Ltd. made it clear that the modification in premiums will be done on yearly premiums across all age groups.
Notably, the changes will be applicable only after the expiry of three years from the date of launch of approved/modified individual product. Also, the modified premiums cannot be changed for the next three years.
As per the experts, this move will let the insurance providers offer various benefits to the customers including greater flexibility and getting things done quickly and offer more customer-oriented products. Also, paying in instalments will make it more affordable for the customers to purchase thereby increasing the penetration of insurance in India. Even senior citizens would find some relief as the modification will make it less burdening for them to own a health insurance .
Also Read
Are Spouses Allowed to Split Health Insurance Premium to Claim Tax Benefit Under Section 80D?
Top 5 Affordable Health Insurance Policies You Can Buy Online in India
