13% of health insurance customers pay premiums in monthly, quarterly EMIs, shows data: How the model works
Around 13% of Policybazaar customers are choosing to pay their health insurance premiums in monthly or quarterly instalments rather than paying the entire amount upfront, as per data shared by the insurance marketplace.
The average annual premium or EMI ticket size among these customers is ₹17,500, Policybaazar noted. The figures are specific to the company’s customer base and does not represent the wider health insurance market trend.
How does the model work?
Under the instalment-based model, customers can purchase multi-year health insurance policies and pay premiums on a periodic basis instead of making the entire payment in one go.
For example, a three-year health insurance plan with an annual premium of ₹12,000 would cost ₹36,000 over the policy term. If the insurer permits equal monthly instalments without additional charges, the customer would pay just ₹1,000 a month for 36 months.
This indicates that instalment-based payments are already becoming a popular option for consumers to manage their premiums, especially at a time when medical inflation is rising and health insurance companies have hiked the premiums, in some cases by a hefty 30% in 2025.
According to the company, multi-year plans can offer an additional benefit by allowing customers to lock in their premiums for an extended period, shielding them from renewal-related premium increases during the policy term. Such hikes can typically be around 10%, depending on the policy terms, it added.
What should customers be aware of?
While instalment-based payments can help households spread their insurance expenses, customers should check the payment schedule, applicable charges and consequences of missed instalments before opting for the arrangement.
Health insurers offer a grace period of 15 days when the premium payment mode is monthly and 30 days for quarterly, half-yearly or annual instalments.
Customers should also understand the claim-related conditions. Unlike traditional EMIs, health insurance products bought on instalments may require customers to pay all remaining instalments upfront when they make a claim, according to an earlier Livemint report.
It also noted that there have also been several instances of insurers rejecting claims in total for policies bought under EMIs stating that instalments due are greater than the estimated and approved claim amount. Failure to pay the remaining instalments will result in the outright rejection of your claim.
Health insurers offer discounts that can vary from 10%-30% if no claims are made during the policy period. But several insurers do not offer this benefit if you buy your health insurance policy under EMIs.
Efforts to make health insurance more ‘affordable’
The shift towards instalment-based payments comes amid efforts to make health insurance more affordable. The reduction in GST on individual health insurance premiums has also lowered the tax burden on eligible policies.
“Health insurance is gradually moving beyond the traditional annual purchase-and-renewal cycle towards a more flexible, long-term protection model. With multi-year policies and monthly or quarterly payment options, customers can spread their premium outgo while securing continuity of cover for a longer period. This signals that consumers are increasingly looking for predictable, manageable ways to fund their health protection,” said Rohan Goel, Business Head of the health insurance segment at Policybazaar.
