Should You Buy Health Insurance on EMI? Here’s What You Must Know

What is Health Insurance on EMI? Health Insurance on EMI is a payment option that lets you split your annual health insurance premium into monthly instalments. Though some insurers also offer quarterly or bi-annual options. This approach aims to make health insurance more accessible by reducing the upfront financial burden. While EMI health insurance may seem convenient, such plans often come with limited choices or hidden conditions. Hence, it is important to understand how it works, especially the claim-related conditions, credit dependencies, and overall cost.

Health insurance on EMI sounds convenient. Monthly payments feel easier on the pocket, and at first glance, it seems like a no-brainer. But is it really practical? And more importantly, does it actually benefit you, or just spread the cost in a way that seems affordable?

While the EMI route may reduce upfront costs, it often introduces restrictions and sometimes, even hidden charges that you might miss until it is too late. At Ditto, we have seen cases where EMI-based health insurance plans delayed claims or proved more expensive in the long term, undermining the goal of preparing for medical emergencies. 

In this guide, we break down what EMI-based health insurance really means, who should consider it, and when it might not be the smartest choice.

Pro tip: The health insurance market can be a labyrinth. Instead of spending hours navigating through the hundreds of policies out there, why not book a 30-minute call with our expert IRDAI-certified advisors? We don’t spam or pressure you to buy. Just honest insurance advice.

How Does Health Insurance on EMI Work?

Health insurance on EMI allows you to split your annual premium into smaller monthly payments, making it easier to manage short-term cash flow. Some insurers offer no-cost EMI health insurance, where the premium is divided without interest. But despite the name, these plans often come with trade-offs.

You might find:

• Fewer policy options or limited features.
• Processing or platform fees embedded in the backend.
• Financing handled by third-party partners like NBFCs or credit card companies.

Even if the premium amount appears the same, extra charges like processing or platform fees can quietly increase what you actually end up paying. Also, if you miss an EMI, the insurer may lapse the policy and deny future claims due to non-payment.

Let’s compare two ways to buy the same health insurance plan:

Option A: Buy Directly (One-Time Payment)

• Premium: ₹23,000 (after insurer discount)
• Total Outgo: ₹23,000

Option B: Buy via EMI Platform (0% EMI)

• Premium: ₹24,000
• EMI: ₹2,000 × 12 = ₹24,000
• Fees + GST: ₹770
• Total Outgo: ₹24,770

You pay ₹1,770 more (7.7% extra) via EMI.

Bottom line: “Zero-interest” doesn’t always mean zero-cost. Buying directly can save you more than you think.

These hidden risks raise an important question we hear often: “Is it better to buy health insurance on EMI?”

On the surface, it seems practical, especially for first-time buyers who prefer flexibility over lump sum payments.

We had a customer from Pune. He was exploring a family floater plan of ₹20 lakh cover for his spouse and children and leaned toward a no-cost EMI plan via a credit card partner. At first glance, it looked like a hassle-free option. But when we reviewed the fine print together, the picture changed.

• The EMI option locked him into a limited policy variant.
• There were additional platform and processing fees hidden in the backend.
• And most importantly, had he missed even a single EMI, the policy could lapse, leaving his family exposed.

We helped him set up a simple Systematic Investment Plan (SIP). This allowed him to save a fixed amount every month and pay his family’s annual health insurance premium in one go. This ensured uninterrupted coverage without third-party involvement or hidden charges.

So, that is how health insurance on EMI works. But how does it compare to paying your premium upfront in full? Let us break it down side by side.

Difference Between Buying Health Insurance on EMI and Lump Sum Payment

Aspect	Health Insurance on EMI	Lump Sum Premium Payment
Payment Method	You pay the premium in installments: monthly, quarterly, or bi-annually.	You pay the entire health insurance premium at once, typically for the full policy year.
Cash Flow	Eases monthly outflow and helps manage short-term expenses.	Requires a large one-time payment, which may strain your monthly budget.
Plan Options	Often limited to specific installment health insurance plans or EMI-compatible policies.	Full access to a wider range of plans with no restrictions on features.
Total Cost	Can turn out to be more expensive due to interest, processing charges, GST on those charges, or hidden fees, even under no-cost EMI health insurance.	More cost-effective in the long run; no additional charges if paid directly.
Involvement of Third Parties	EMI often handled by fintech lenders or credit card partners, which may lead to added conditions.	Premium goes directly to the insurer, no middlemen involved.
Risk of Lapse	Missing an EMI can result in policy lapse or claim rejection.	Once paid, the policy remains active for the full term. No risk of interruption.
Financial Discipline	Can feel convenient but adds complexity. May lead to poor tracking or defaults.	Encourages better financial planning, possibly through Systematic Investment Plan (SIPs) or Recurring Deposit (RDs).
Who It Suits	May suit those with temporary liquidity issues or very tight budgets.	Better suited for those who can plan and save ahead, ensuring uninterrupted cover.

In Short: Health insurance on EMI spreads out payments but may incur hidden costs and risks, while lump sum offers better control and long-term value.

As you can see, both options serve different needs. But before making a decision, it helps to understand what factors you must consider upfront.

Limitations of Health Insurance on EMI: Things to Consider Before Buying

Before you commit to an installment plan, here are some things you should absolutely know.

1. Claim Settlements Can Be Affected: If you raise a claim within the first 6 months of buying your policy on EMI, some insurers may either deduct the remaining premium from your claim payout or ask you to clear all pending installments before processing it. This can be particularly stressful in emergency situations.
2. Mode of Payment Can Be Changed at Renewal: You are not locked into EMI forever. Most insurers allow you to switch between EMI and lump sum payment modes during policy renewal. This gives you the flexibility to reassess your financial comfort each year.
3. No-Cost EMI Is Not Always Cost-Free: Despite the term “no-cost EMI health insurance,” many insurers or payment platforms build in processing fees or slightly inflated premiums. The base premium may appear unchanged, but the final payment over the year can still increase. Always verify the total cost before opting in.
4. Timely Payments Impact Credit Score: Since many medical insurance EMI plans are routed through NBFCs or credit card partners, missing payments can affect your credit score just like any other loan default. This can also impact your eligibility for future loans or EMIs.
5. Reduced Free-Look Period in Some Cases: Some insurers may shorten the standard 30-day free-look period if you choose to pay your premium via EMI. This limits your ability to cancel or change your policy without penalties. Additionally, the grace period, the time allowed to make a missed payment without policy lapse, may also be reduced under EMI-based plans, especially when third-party financing is involved. Failing to pay within this shorter window could lead to a lapse in coverage.
6. Not All Plans Support EMI: EMI payment options are not available for every health insurance plan. You may need to compromise on features, sum insured, or insurer choice just to access EMI flexibility. Always check whether you are choosing the right policy, not just the right payment method.
7. Third-Party Involvement Adds Complexity: Many EMI plans involve a third-party financier who handles the payment. This adds an extra layer of approval, repayment tracking, and sometimes delays. At Ditto, we have seen cases where such partnerships caused issues in policy issuance or claim settlement.
   
   A customer bought a ₹15 lakh health policy via a third-party EMI plan: ₹1,250/month on auto-debit. In the third month, her bank couldn't process the EMI due to insufficient funds and the client didn’t realise the payment had failed. Days later, she needed emergency appendix surgery and filed a claim.
   
   The Issue: The lender had flagged the missed EMI, leading the insurer to put her claim on hold. Resolving it took nearly two weeks, multiple follow-ups, and a fresh NACH (National Automated Clearing House) setup—a centralized system in India used for automated recurring payments like EMIs, SIPs, and utility bills.
   
   The Lesson: Third-party EMI plans can delay claims due to payment issues. A self-funded route like a recurring deposit could’ve avoided this entirely.
8. Short-Term Ease vs Long-Term Control: EMIs ease short-term costs but often bring added complications like credit checks and hidden charges. In contrast, setting aside a small, fixed amount every month in a Systematic Investment Plan or recurring deposit allows you to pay your annual premium in full when it is due. It is a more proactive and transparent approach.

These are some of the lesser-known drawbacks of health insurance on EMI that go unnoticed until it is too late. To help you make a clearer decision, let us walk through some of the most common questions we get at Ditto.

Can You Get Health Insurance on EMI: What is the Eligibility Criteria?

On the surface, getting a medical insurance EMI plan seems easy. And in most cases, it is, as long as you tick a few basic boxes:

• You’re between 18–65 years old.
• You have a valid credit/debit card, or a financing tie-up through NBFCs.
• You have a stable income and decent repayment history.

But here is where it gets tricky: eligibility is not always set by the insurer. If the EMI option is enabled via a third-party platform (which it often is), your credit score or financial profile might influence whether your EMI is approved at all.

At Ditto, we have seen many cases where a customer picked an EMI option only to find their application delayed or rejected later due to banking issues, something they didn’t expect when buying the policy.

One of our customers opted to pay for the plan via the EMI option. However, due to an underwriting issue, the policy was cancelled, and while the payment was reversed to the loan provider, the EMI loan itself wasn’t closed automatically. The customer then faced a frustrating experience trying to reach the lender’s support team, with no clear way to contact them. It took nearly a month to resolve the issue, and they even had to bear unnecessary foreclosure charges to finally close the loan.

Do EMI Plans Actually Come with Hidden Charges?

Here’s the honest answer: Yes, sometimes they do.

Even if it is labelled as a no-cost EMI health insurance, you might still end up paying more. Why? Because:

• There could be platform or processing fees built into the premium.
• EMI through credit cards may attract interest if dues are not cleared in full each cycle.
• The premium itself might be slightly marked up to absorb these convenience costs.

What seems “no-cost” upfront may not be no-cost once you add everything up.That is why, we suggest comparing the total EMI outflow across 12 months against the single lump sum payment. The results can be eye-opening.

Can You Switch from EMI to Lump Sum (or vice versa) Later?

Yes. Most insurers allow you to change your premium payment mode at the time of renewal. So if you start off with health insurance on EMI this year and decide to go for a full payment next year, you can do so easily.

However…….

If you choose a third-party EMI option like an NBFC or credit card, your ability to prepay or change the payment mode depends on the financier’s terms, not just the insurer’s.

You essentially have two agreements: one with your insurer for coverage and another with the financier for the loan. Therefore, it is crucial to confirm these details with the EMI provider during the purchase process as their conditions might differ from the insurer's and can affect your financial flexibility.

And that brings us to something most people overlook: when you choose the EMI route, who are you actually paying every month? Because in most cases, it is not the insurer.

Health Insurance on EMI: Do You Pay the Insurer or Financier?

When you opt for health insurance on EMI, it's crucial to understand who receives your monthly payments. Many people assume they are paying the insurer directly in installments, but this is usually not the case.

Here's the reality: When you choose an EMI option, whether through a credit card, a debit card EMI facility, or an NBFC partnership, a third-party financial institution actually pays your entire annual premium to the insurance company upfront. In essence, this institution provides you with a short-term loan for that premium amount. You then repay this "loan" to them in smaller, manageable EMIs.

This distinction is important because the terms and conditions governing your EMI plan like eligibility, interest, processing fees, or what happens if you miss a payment, and most importantly, your ability to prepay or switch payment modes mid-term are set by that financial institution, not your insurer. Your health insurance policy remains active with the insurer as long as they receive the full premium, which the financier handles. Knowing this helps you fully grasp the commitments beyond just your policy's coverage.

Are EMI Options Available on All Types of Health Insurance?

Not really. While many individual health policies and family floater health insurance plans offer EMI flexibility, others do not. In particular:

• Super Top-up covers or senior citizen plans often skip EMI altogether.
• EMI-based options may be limited to specific plans on aggregator platforms or fintech apps.

Many customers choose health insurance based on EMI availability, but this can lead to compromises on benefits like room rent limits or claim settlement ratios.

While EMIs may seem affordable now, premiums can rise and increase the burden. At Ditto, we advise thinking long-term: if you can’t commit to the EMI structure year after year, it might not be the right choice.

Now that you know the ins and outs, it is time to look at what this option actually brings to the table and whether the benefits hold up beyond just convenience.

What Are the Benefits of Health Insurance on EMI?

Every coin has two sides, and health insurance on EMI is no different. While we have raised valid concerns throughout this blog, that does not mean the option is entirely without merit. 

So instead of viewing it as right or wrong, let us walk you through the benefits to help you make an informed choice.

1) Improved affordability

Paying your health insurance premium in smaller parts, whether monthly, quarterly, or bi-annually, makes it more manageable for those who cannot afford to pay a lump sum. This is especially useful when buying a policy with higher coverage or comprehensive features.

2) Helps manage higher coverage plans

Paying your health insurance premium on EMI can make it easier to go for a policy with better coverage or added features. Something you might postpone due to a high lump sum premium. Just make sure the EMI does not come with hidden charges or limited features.

3) Flexibility in financial planning

A health insurance EMI plan allows you to align premium payments with your income cycle, be it for salaried or self-employed individuals. This helps avoid sudden pressure on your monthly budget.

4) Support during financial stress

For someone facing a financial crunch or recovering from unexpected expenses, paying health insurance on EMI ensures they can still stay covered without missing out on essential protection.

5) Availability of no-cost EMI options

Some insurers or fintech platforms offer no-cost EMI health insurance plans, where you pay the premium in parts without additional interest. While we have discussed the caveats, this structure can be helpful if the terms are transparent and suit your financial situation.

6) Tax Benefits Still Apply

Even if you choose to pay your health insurance premium on EMI, you can still claim tax deductions under Section 80D of the Income Tax Act, 1961 (under the old tax regime). The key factor here is the total premium amount, not how you pay it.

Make sure the policy is active and paid via a traceable method (like online banking or cards only), and keep a record of the premium receipts. At Ditto, we often remind our customers to download their complete premium certificate at the end of the financial year, even if they have chosen health insurance on EMI, to claim deductions smoothly.

While the upside is clear in some cases, the real question is: how do you go about buying such a plan, and what should you know before doing so?

How to Buy Health Insurance on EMI

Buying health insurance on EMI is fairly simple today due to digital platforms, flexible payment tie-ups, and even fintech startups that offer EMI-based healthcare loans. But while the process seems straightforward, there are a few things to keep in mind before you commit.

Can I Buy EMI Health Insurance Online?

Yes, most insurers now offer the option to pay health insurance premiums on EMI basis directly through their websites or via insurance aggregators. You will usually see the EMI option at the payment stage, either offered by the insurer or through a partnered financial institution (like a credit card provider or NBFC).

Many customers often assume EMI is built into every policy. But the truth is: EMI availability depends on the insurer, the type of policy, and the payment partner involved.

What Documents Are Required to Buy Health Insurance on EMI?

When opting for health insurance on EMI basis, the documentation is mostly the same as a standard health insurance purchase. However, if a third-party loan or credit facility is involved, you might be asked for a few additional details.

Here’s what is usually required:

• A completed proposal form: This is your basic application form with all necessary personal and policy details.
• Identity proof: Documents like your Aadhaar card, passport, PAN card, or driving licence.
• Address proof: Again, Aadhaar, passport, or any other officially valid document showing your current address.
• Income proof: If you're going through a financing partner (like an NBFC), you might need to share recent salary slips or bank statements to verify repayment ability.
• Medical records: Depending on your age and health history, the insurer may request recent diagnostic reports or ask you to undergo a pre-policy medical check-up.

Can I Get Health Insurance on EMI Without a Credit Card?

Yes, in certain cases. While credit cards are the most common mode for health insurance on monthly EMI, some insurers allow EMIs via:

• Debit cards (if your bank supports it)
• NBFC loan providers
• Fintech platforms with EMI-on-UPI or bank-linked EMI solutions

Note that these options may come with additional service charges, shorter repayment tenures, or eligibility filters. So it is not always as simple or cost-effective as it seems. 

When to Opt for EMI in Health Insurance Payments

• You are just starting out in your career and cannot afford to pay the full premium upfront, but you still want to stay covered.
• You want to buy a high-value policy for your family that goes beyond basic coverage, and splitting the payment helps you avoid compromising.
• You have a very short-term liquidity crunch and are confident about paying EMIs without delays or defaults.
• You are eligible for a genuine no-cost EMI plan, with zero hidden charges or processing fees (always read the fine print).

Ditto’s Take: If you are considering buying health insurance on EMI, make sure you: 1. Read the EMI T&Cs carefully 2. Check whether the EMI changes the total premium payout 3. Understand who is handling the EMI (insurer vs third-party) 4. Ensure the EMI tenure and monthly amount fit your budget If the premium feels too steep to pay all at once, consider setting aside a fixed amount every month, either in a SIP, recurring deposit, or even a simple savings account. This lets you build your own premium fund gradually, without relying on health insurance payment on EMI options that may come with added conditions or third-party dependencies.

Why Approach Ditto for Health Insurance?

At Ditto, we’ve assisted over 7,00,000 customers with choosing the right insurance policy. Why customers like Deepak below love us:

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Final Thoughts

Health Insurance on EMI can make premium payments easier, but they come with trade-offs. If a claim is made before all EMIs are paid, insurers may deduct the unpaid amount from the claim. Some policy benefits may be exempt from this, so you must review the policy terms in detail.

Also, EMI payments usually don’t qualify for tenure-based discounts, which are available when you pay for 2–3 years upfront in a lump sum. Paying in full keeps things simpler, more transparent, and more cost-effective.

Before choosing EMIs, weigh the pros and cons carefully. Premiums depend on factors like age, health, and coverage, and an 18% GST applies. Use our premium calculator to get a more accurate idea of your yearly cost.

At Ditto, we suggest avoiding EMI-based plans unless absolutely necessary. Instead, set up a monthly SIP or recurring deposit to build your premium fund. This way, you stay financially prepared, avoid unnecessary fees, and maintain complete control over your policy.

Want coverage that fits your budget without the EMI confusion?

Our advisors will help you compare plans, calculate costs, and even suggest smarter saving strategies. Book a free call with Ditto today.

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