With the pandemic wreaking havoc and bringing about major changes in people’s livelihoods and their lifestyles, the Insurance Regulatory and Development Authority of India (IRDAI) introduced the provision of buying health insurance plan in instalments. The move is aimed at making health insurance plans much more affordable given the ongoing situation.
Here, we look at the benefits of buying insurance plans on Equated Monthly Instalments (EMIs):
- Higher coverage - With the availability of the EMI option, buying a high-sum insured plan has become affordable. No one needs to compromise on quality treatment. A health insurance plan of Rs.1 crore for a period of 30 years can be availed at a cost of Rs.600-800 every month. To avail a higher coverage, one does not need to burn a hole in the pocket.
- EMI option is accessible to all – As a hefty amount is not needed to be paid in one go, buying a health insurance plan on EMI is accessible to people for all sections of the society. Be it the urban population or the rural population, buying a health insurance plan on EMI enables them to keep the monthly budget in balance as well as provide cover for medical emergencies.
- Tax benefits: Individuals can claim tax deductions up to Rs.50,000 in premiums paid as EMIs under Section 80D of the Income Tax Act, 1961.
- Payment of EMIs can be made online: The EMI can be paid on the due date using the online mode or by choosing the auto-debit option. This is helpful during these times when it is necessary to follow social distancing norms. One can set reminder alerts about the EMIs as well to ensure that the due dates aren’t missed.
- Helpful for senior citizens: With the senior citizens being more prone to diseases, buying a health insurance plan on EMI helps them avail best-in-class medical treatment without needing to worry about their finances. It needs to be mentioned here health insurance is not quite affordable for senior citizens as the age factor increases the cost.
Given the benefits, it is advisable to buy insurance on EMI as it eases the whole process and makes it accessible to everyone without disturbing their budget during these testing times.
GST rate of 18% applicable for all financial services effective July 1, 2017.
Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.