Health insurance premium can be paid monthly

K. Aravind

Due to the financial difficulties of the COVID-19 period, it may not be possible for many to pay large sums of money as one-time insurance premium. Such persons have the opportunity to pay the premium of the health insurance policy every month. It is also possible to pay the premium on a quarterly, half-yearly or annual basis. Until recently, the premium for a health insurance policy could only be paid on an annual basis.

Paying premiums together during the year can be a financial burden for many. Many people do not remember that they have to find and set aside money every month for expenses such as insurance or premium paid once a year. As such, it may feel like a financial burden when paying the premium, among other expenses. Those who want to avoid this now have the opportunity to pay a monthly premium.

There is no increase in the base premium when the monthly premium is paid but there may be a slight increase in the total premium when paid on an annual basis. The insurance company is allowed to make a slight increase in the total premium when the premium is paid on quarterly, half yearly and annual basis. Depending on the type of increase plans may vary.

Existing health insurance policyholders also have the option to switch to a premium payment on a monthly, quarterly or half-yearly basis. This can be done at the time of policy renewal. A special form has to be filled up at the time of renewal of the policy.

Paying the monthly premium will also help to increase the coverage. For example, for a policy with coverage of Rs.5 lakh, the premium would be Rs.12,000 per annum. If a person who pays this together feels a financial burden, he has two options. He/she can either reduce the amount of coverage or adopt monthly premium payment method. Adequate coverage of health insurance needs to be ensured. Therefore, instead of reducing the coverage, the policy can be taken out with the required coverage if the monthly premium method is adopted.

Policyholders may have doubts as to whether coverage will be available if the claim is made less than one year after taking out the policy in the monthly premium plan. In such cases, the insurance company may ask you to pay the remaining premium.

For example, suppose the claim is filed six months after the premium is paid. The insurance company may ask you to pay the remaining six months’ premium or charge six months’ premium from the claim amount. At the same time, the IRDA rules that if any disease is diagnosed within three months of taking out the policy, it will be treated as a pre-existing disease. It also applies to those who pay monthly premium. Therefore, if a diagnosis is made within three months after taking out the policy, no claim will be allowed.