IRDA’s COVID Relief: Pay Health Insurance Premium in EMIs

In yet another move to ease the financial woes of customers amid the COVID19 outbreak, the Insurance Regulatory and Development Authority (IRDA) has directed health insurance companies to accept premiums for medical insurance policies in instalments.

The insurance regulator has indeed asked the insurance companies to allow customers to pay a premium in monthly, quarterly, or bi-annual instalments from immediate effect. Though, the regulator had issued guidelines to allow insurance premium payments in instalments from Oct 19. It has now requested the insurance companies to bring this payment relief on a priority basis.

The insurance companies are given a choice to transfer this repayment relief for 12 months or permanently as per their IT preparedness for the same. The final terms and conditions will be released by the specific insurance company to its customers.

The move will make health insurance more affordable in India, and more people will be able to buy medical insurance.

A lot of health insurance products are already offered on instalment payments. However, many products are yet to be linked for flexible premium payments.

Benefits of EMI Premium Payment for Health Insurance:

• This will make insurance attractive to those who were not able to buy because of the high cost of annual lumpsum payments.
• An affordable health insurance policy will surely attract more people living in small towns and rural areas. According to one study, only 14.1% in these areas are covered for health.
• The reach will extend in cities as well as 80 % of the people in urban areas are also not covered.
• Amid the pandemic outbreak, it has become a necessity to purchase insurance. With lower premium to pay, people would be able to switch to e-mode of payment at greater ease. Also, it will help tap maximum benefit without hurting your monthly budget.

However, the cost of the premium would be a bit high if you choose to pay a premium in instalment. If you can afford to pay the annual premium, you may consider paying in the same mode. Amid cash crisis though, it does come as big relief to save a few thousand rupees for later.

Other guidelines issued by IRDA for COVID19 challenges:

• Term Plans:

IRDAI has offered 30 extra days for paying premiums of life insurance policy falling due in March 2020 and April 2020.

• ULIPs:

All ULIP policyholders who have plan maturity due in March, April, or May 2020, are allowed to postpone closure or maturity of this market-linked insurance plan for up to 5 years.