What is the flip side of Monthly health plan premiums?
People at the young age brackets get lured of the option of monthly health plan premiums because of a variety of reasons. They are easy, not at all cumbersome to handle and add monotony to the health insurance plan, setting a routine for the insurance holders where there is no tension of paying a lump sum amount at the end of the year. Insurance Regulatory and Development Authority of India (IRDAI) introduced this monthly health plan premiums option as it provides a little comfortable space for the insurance holders not to pay a steep one-time hefty payment but divide it in instalment amount. This problem was a significant setback due to the outbreak of Covid 19, and there was increased financial instability among people. The IRDAI either asked the insurance companies to introduce the scheme based on providing temporary relief or permanently for 12 months until 31st March 2021.
This idea’s genesis was floated in September 2019 when the insurance companies were asked to make few changes in their already existing policies. It finally was implemented in October 2020.
What does this monthly health plan premiums mean?
It means that the policyholders have to pay a monthly amount towards their health premium as instalments. Only a few insurance companies have implemented this plan as of late. It offers a choice to the policyholders of paying yearly, quarterly, or half-yearly instalments. Most (not all) insurance companies are sticking to the option of monthly instalments facility. This becomes helpful in areas where there is a financial crunch, and affordability is a significant challenge. This option of monthly health plan premiums helps provide a more robust trust-building mechanism between the insured and insurers.
It is also dependant on the nature of the place, and the age group that people belong to that helps make them decide whether they would want to opt for this facility or not. For example, people in the age group of 25 – 30 are the ones who generally get attracted to this facility and also the ones who live in developed cities like the metropolitan areas because they have more knowledge of the EMI options and use it often in their lives. Because of these monthly health plan premiums, there is a boost to the mediclaim policies that have been circulating around for so long in our busy, everyday lives. Still, we do not give due accreditation and importance in knowing them.
The benefits of this facility are the same throughout all insurance companies with a few differences perhaps. There can not only be advantages to this facility that has been circulating and being hailed around. There can be a flip side too, which is essential, at least to be aware of.
For more information on these slight differences, it is essential to carefully read all the guidelines before submitting any health insurance policy.
- One of those can be that the premium amount will be higher than the total value of money. This indicates that the total value of money keeps going down from time to time.
- There can also be a risk of policy lapsing and lack of coverage in this facility. Sometimes, the insurance holders unknowingly or knowingly perhaps become privy to automatic monthly money deductions from their accounts. This means that even if monthly deductions of premiums are helpful for people in case of financial crunch if by chance there is no money left in the account, this will mean that there will be a missing premium and will result in the policy lapse. There is a grace period of 15 days that are given to people, but one must be vigilant while signing for these policies.
- Also, another feature is of late payments which are another hindrance in these policy measures. It means coverage is absent for that particular time period. According to IRDAI, during the grace period, the policy’s coverage will not be in force from the due date of payment until the date of receipt of premium.
- There is another option of cancelling the policy that is available for the insurers. This happens when the money is not collected even within the grace period. So one must stay on guard that these policy conditions and precautions are kept at close quarters, and people do not ignore such terms.
- It is possible that the monthly health plan premiums also impact the claim policy conditions. According to the circular of IRDAI, it is notified that an insurer can deduct the entire premium amount from the subsequent premium instalments from the claim amount.
It is to be noted that all companies have not been able to roll this policy plan in their existing norms because there is a restriction on technology. The technology is not so advanced enough till date that all companies can implement such a measure. Some companies that have been able to implement this plan are Star Health & Allied Insurance Co. Ltd., Care Health Insurance Ltd, HDFC ERGO General Insurance Co. and Cholamandalam MS General Insurance Co. Ltd.
The insurance companies also think that these monthly payments do not retain the customers for the companies, and an annual payment method is kept better for retaining customer loyalty as everyone cannot make payments monthly.
But for some people, this option works best because of the prevailing cash crunch situation, and most health insurance options become unaffordable for people. That is why this option of the monthly payment is also preferred.
Therefore, the advantages and its flip sides must be kept in mind while going on the lookout of this monthly premium option. It is available for renewal option also. If you want to research more about insurance, visit BimaKaro.in. It has the most comprehensive database of information for various plans and a team of highly qualified insurance advisors to answer any query you might have.