Health Insurance is a basic necessity these days. With a rapid increase in the spread of various critical diseases, lifestyle ailments, etc. a healthy life has become a distant dream today. A medical emergency can arrive at any moment without any prior notice. So, your clients should be prepared mentally and financially to face such a critical situation in life.
Health insurance gives the strength to fight against the medical emergency without the fear of any financial emergency. Health insurance is an agreement between your client and an insurance provider to cover the expenses incurred during your client’s medical emergency. This coverage is provided by the health insurance provider on the payment of premiums by your client.
Health Insurance premium and its payment
The health insurance premium is an essential part of the health insurance policy. The payment of health insurance premiums has to be paid on time to keep your client’s health insurance active. The health insurance segment is a dynamic segment and the payment for health insurance premiums can be done in several ways. There is an implementation of constant changes in the provisions related to health insurance premium payments to make health insurance policies even more convenient for use.
Some of the common existing methods for the payment of the health insurance premium which you can explain to your clients are mentioned below.
- Online premium payment
This is the most convenient method of health insurance premium payment. Your client can visit the website of the insurance provider and pay the health insurance premium by either internet banking or by using a credit card/ debit card.
- Credit card
Credit cardholders can set standing instructions on their credit card which will lead to auto-debit of the required amount as health insurance premium.
- Electronic Clearing System (ECS)
The ECS is an automated facility by which the health insurance premium is auto-debited from the bank account directly on the insurance premium due date.
- By mobile wallets
Your client can recharge mobile wallets like Airtel Money, Vodafone, etc. and pay for the health insurance premium by its help.
- Through ATMs
Many insurance providers have tied up with various banks and your client can pay their premium at the ATMs of these banks.
New provisions in health insurance premium payment
In the interest of consumer from the affordability point of view, the IRDAI (Insurance Regulatory Development Authority of India) has passed a proposal by which there would be easier options for the payment of health insurance premiums by policyholders. Now, policyholders can have the option of paying their health insurance premium on a monthly, quarterly or half-yearly basis.
The IRDAI has also made it clear that the payment of health insurance premiums on an installment basis or EMI will not bring any changes in the basic premium of the health insurance policy. The IRDAI has issued a circular for informing and instructing about this change in the frequency of insurance premiums to the various health insurance providers in the country.
- Benefits/Advantages to customers:
With the new proposal on health insurance premium being taken on EMI, not only the insurance providers but the customers will also be able to avail some benefits.
- The accessibility for health insurance would be higher for rural people. Without the option for premium payment on a monthly basis, rural people were not able to afford health insurance plans
- Customers will now opt for health insurance plans with a high sum insured which they were not able to do earlier as the premium was high and had to be paid in lump sum
- This new proposal will increase the awareness for health insurance among common people
- Customers having low monthly income will also be able to afford health insurance plans now as they can pay the premium monthly even.
- Benefits to you as an Insurance advisor:
- With the increase in the number of people purchasing health insurance policies from you, there will be a huge increase in business volume. This will be a great benefit for you and the entire Insurance advisors’ community
- Since there will be increased business, there will be increased income for you. With an increased number of people approaching you for buying health insurance policies, there will be a significant increase in your earning
- Benefits to insurance companies:
This new proposal by IRDAI will be advantageous for the insurance providers as:
- There would be an increase in the demand for health insurance plans since health insurance premiums can be taken on EMI without any interest being levied on the installments paid
- When individuals will have the provision for making the payment of premium in installments or EMI, they will opt for health insurance policies having a high sum insured. This will, in turn, help the insurance providers in higher collection of health insurance premiums
- Since premium payment has become affordable now, customers will opt for health insurance policies with add-ons. This will also increase the premium collection by the insurance providers.
Hence, with this new proposal of the IRDAI, its win-win for all, your customer, you as an advisor as well as the insurance companies!