According to data shared by Policybazaar, approximately 13% of customers are choosing to pay their health insurance premiums in monthly or quarterly instalments rather than making the entire payment upfront. The average annual premium or EMI ticket size among these customers is ₹17,500. These figures are specific to Policybazaar's customer base and do not represent the wider health insurance market trend. The trend comes amid increasing healthcare expenses and growing awareness of the need for adequate health coverage, with monthly payment options becoming an important factor in making health insurance more accessible.
Under the instalment-based model, customers can purchase multi-year health insurance policies and pay premiums on a periodic basis. 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 arrangement allows customers to spread their insurance expenses while securing continuity of cover for a longer period. By dividing premiums into smaller payments, customers can manage insurance costs alongside regular household expenses while maintaining coverage.
According to Policybazaar, multi-year plans can offer additional benefits 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. The shift towards instalment-based payments comes amid efforts to make health insurance more affordable, with the reduction in GST on individual health insurance premiums also lowering the tax burden on eligible policies. Monthly payment arrangements can support policy persistency and renewals because premiums are collected periodically, making health insurance more affordable for customers.
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 that unlike traditional EMIs, health insurance products bought on instalments may require customers to pay all remaining instalments upfront when they make a claim. The increasing adoption of instalment-based premium payments could have wider implications for insurers and intermediaries, with flexible payment structures helping expand health insurance participation among households with constrained or irregular cash flows.
Rohan Goel, Business Head of the health insurance segment at Policybazaar, noted that health insurance is gradually moving beyond the traditional annual purchase-and-renewal cycle towards a more flexible, long-term protection model. He emphasized that consumers are increasingly looking for predictable, manageable ways to fund their health protection, with the reduction in GST on individual health insurance premiums also contributing to making health insurance more affordable. Policybazaar has been offering monthly and EMI payment options across health insurance products, highlighting monthly-mode business as one of the ways through which health insurance can become more affordable for customers.
