You no more need to cut down on sum insured if it is tough to pay the entire premium in one go. This is becasue you can now pay health insurance premium on monthly basis. You just need to choose the right option- half yearly, quarterly or monthly- to start with your health insurance policy
Shreeraj Deshpande, Head - Health Insurance, Future Generali India Insurance Company Limited, says, "Under single premium policy one doesn't go for higher sum insured. Through instalment option one can go for a higher sum insured." Future Generali India Insurance claims to be the first company to launch health policies that allow you to pay premium through instalment mode.
Does it mean extra premium? Yes, when you choose to pay in instalments you have to pay extra premium ranging from 3-5% depending on the span of payment. "For half -yearly premium there is loading of 3%, for quarterly mode it is 4% and on monthly instalments it is 5%," adds Deshpande.
There are a few fine prints which you should know about before going for instalment option. First, the instalment option is available only with 2 and 3 year old policies. It is not there with one-year old policy. Moreover, in case of a claim, annual premium would be deducted from your claim amount first. For example: If there is a claim in the fourth month of the policy, the company would pay you claim amount after deducting premium of next 8 months. "This is because according to the Insurance Act, before you pay the claim amount, one year premium should be deducted, " says, Deshpande.
On the brighter side the company doesn't charge you higher premium if your age slab changes in between the term of the policy. For example if the company's premium slab changes on 46, and your three year policy expires on 47 the policy doesn't charge you higher premium for change in slab. Only when it comes for renewal your premium would be revised according to the latest age slab.
Several other insurers have received approval from the regulator for monthly payment of health insurance policies. Experts say many more such policies are expected to be launched in the market.
Sandeep Patel , MD& CEO , Cigna TTK Health Insurance , says, "Instalment premium options are a very good mechanism to help penetration of health insurance especially in the middle and lower middle income groups where affordability is a big challenge. Yearly premiums for insurance as a onetime cost are higher when one is looking for higher sum insured options as well for higher age groups, especially senior citizens. CignaTTK has in the past approached the regulator for similar options and has also been considering creating similar plan options in the future."