Health Insurance on EMI

What is Health Insurance on EMI?

Health insurance on EMI allows policyholders to split annual premiums into equal installments (monthly, quarterly, or half-yearly) instead of paying a lump sum. In India, IRDAI introduced this option in 2019 to improve affordability and make it easier to buy higher coverage. The EMI can be offered directly by the insurer through an auto-debit mandate (UPI, netbanking, debit cards) or via a financier, such as a credit card or NBFC. While it helps cash flow, it can raise your total cost and complicate claims if installments are pending.

Most of us run our lives month-to-month. One 2025 study found that earning Indians spend over 33% of their monthly salary on EMIs.

Health insurance premiums also compete with these same monthly expenses. So when a health insurance plan asks for an annual payment, paying the premium in monthly installments can feel like the obvious fix. That is why IRDAI introduced the option to buy health insurance on EMI in 2019 to boost affordability and penetration. They fast-tracked its rollout via an April 2020 circular after the COVID pandemic.

Even though premium-in-installments is gradually expanding, it is still not widely available. Insurers remain cautious because it increases administrative work and raises the risk of missed payments. As a result, many insurers either charge a small frequency loading or offer installments only for selected plans. For example, insurers like Care offer installment options on select products like Ultimate Care.

In this article, we will walk you through the types of health insurance EMIs and their sample premiums to understand which option makes more sense.

Types of Health Insurance on EMI Basis

1) Insurer Offered EMI

Your insurer allows premium payment in installments by setting up an e-mandate on your account (via UPI, Netbanking, credit/debit cards).
Your annual premium is split into monthly, quarterly, or half-yearly installments. If a payment is missed, you get a grace period of 15 days (monthly) or 30 days (other modes) with coverage continuing during this time.
This is not a loan, but a premium frequency option with a small loading.
However, very few insurers in India offer low-cost EMIs. A good example is Star Health Insurance, which offers an EMI facility on its flagship plans like Super Star and Star Comprehensive.

Pro Tips:

Keep the debit date right after your salary hits the account.
Set a low-balance alert to avoid debit bounces, penalties, and coverage loss.
Update the mandate details if you change your bank account.

2) Credit Card EMI or NBFC Financing

This is the most common way to buy health insurance on EMI.
Your bank/card pays the full premium upfront to the insurer, and you repay in EMIs with interest and charges, usually 12-18% depending on the card and bank.
This is a loan; the insurer gets the full premium upfront, and you repay the lender with interest/fees.
If you miss an installment, your policy stays active (since the insurer got the premium), but it can hurt your credit score and add penalties.

Pro Tips:

Ensure your credit limit is sufficiently high because paying the full premium may block usage.
Set autopay in full for the credit card bill.
Align your EMI pay date with your salary cycle.
Keep your credit card utilization under 30% to protect your credit score until you pay all EMIs.

Did You Know?

Most credit cards exclude insurance premiums from their rewards. Whether you pay your life/health/motor premium by card, you earn no points, miles, or cashback. The only real benefit is the 45–55 day interest-free window, which helps to maintain the cash flow.

Benefits and Drawbacks of Health Insurance on EMI

Benefits	Drawbacks
Easier on Monthly Cash Flow: You do not need to arrange one big annual payment at once.	Can Cost More Overall: EMI usually adds interest, processing fees, and GST on charges, plus some plans remove multi-year or long-term discounts with EMI, so your total payout for the year goes up.
Cover Can Start Immediately: Useful if you want the policy active now instead of waiting to “save up” for the lump sum.	More Moving Parts: Autopay mandates, lender terms, and multiple due dates make it easier to slip up.
Makes Higher Coverage Feel Affordable: Helps buyers choose a better plan (higher sum insured) while keeping monthly outgo manageable.	Card Limit Can Get Blocked: On credit card EMI, the full premium amount can temporarily reduce your usable limit until EMI conversion and repayment.
Helps You Plan a Fixed Debit Date: You can align the installment date with your salary cycle (reduces stress and missed payments).	Claim-time Surprises: Many installment setups allow insurers to adjust unpaid installments from claim payout or demand the remaining premium for that policy year at claim time

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Sample Premiums for Health Insurance on EMI

Here’s a monthly premium breakdown for the insurer-EMI option of Star Health’s Super Star plan.

Profile	Annual Pay	Monthly Pay	Annual Total (Monthly Pay)
Individual Plan: Age 25	₹9,354	₹810	₹9,728
Family Floater, 2A 1C: Ages 35, 34, 5	₹17,615	₹1,527	₹18,320
Family Floater, 2A: Ages 62, 63	₹67,824	₹5,878	₹70,537

Note: These are indicative premiums for a Delhi resident, pincode - 110001, with a ₹15 lakh sum insured. Your premium may vary based on age, city, medical history, plan variant, and the payment frequency you choose.

As you can see, monthly pay is about 4% costlier than annual pay due to installment loading, so you end up paying more across the year even though the monthly amount feels easier on the pocket.

Health Insurance on EMI vs. Lump Sum Payment

Basis	Health Insurance on EMI	Lump Sum (Annual)
True Yearly Cost	Can cost more. Insurer EMI: ₹2,600 per month (₹31,500 per year) due to frequency loading on ₹30k premium. Credit Card EMI: ₹2,780 per month (₹33,300 per year) @ 15% interest + processing fees.	You pay the quoted premium once, and you are done for the year. Plus, if you pay once for 2-3 years, you get extra discounts (up to 10%) and lock your premiums against increase due to medical inflation.
Claim-time Surprise Factor	Mid-year claim: remaining installments may be recovered or deducted. For example, if 6 installments are pending on a ₹30,000 premium, ₹15,000 can be deducted from the claim or asked to pay upfront.	Cleaner at claim time. There is no “remaining premium for the year” to adjust during a claim because you already paid in full.
Cancellation and Refunds	If you cancel, IRDAI allows cancellation with 7 days’ notice, and refund rules apply, but if you financed via a lender, you may still owe the bank EMIs and need to settle that separately.	Cancellation is simpler financially because there is no separate lender repayment running in parallel. Refund rules still depend on IRDAI conditions and whether a claim happened.
Risk of Missing Payments	Two different risks: insurer-installments risk policy disruption if you do not pay on time; credit-card EMI keeps the policy active, but can damage your credit and add penalties.	You remove the monthly “oops, I forgot” risk entirely because there are no recurring premium debits for the year.
Spending Power	Credit-card EMI can temporarily block your limit because the insurer is paid upfront, and you repay the bank. That can matter if you need the card for emergencies.	Your card limit stays free, unless you choose to pay the annual premium by card, in which case it is one big swipe, but not an EMI lock-in.

Our Recommendation

Always opt for annual payments as far as possible. It's the cheapest option and the one with the least hassle and claim-time surprises. Insurance should be convenient and not something you have to track every month.

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Ditto’s Take on Health Insurance on EMI Basis

We recommend paying annually because it is a cheaper, simpler option, and avoids claim-time deductions for pending installments.

If you still want to get health insurance on EMI:

Pick insurer-offered installments first (when available) as the interest rate is lower than credit-card EMI, and you get a regulated grace period window.
Use credit card EMI only as a last resort. It often increases the total cost and can block your card limit, plus missed EMIs hurt your credit score.

What can you do instead:

Sinking Fund: Auto-save monthly in a Recurring Deposit or separate account, then pay annually.
Card float, Not EMI: Pay the annual premium by card and repay within the interest-free window (if you can clear it in full).

We also recommend picking the best health insurance plan that keeps your coverage active without adding unnecessary cost or complexity.

Frequently Asked Questions

Can I cancel my health insurance policy on EMI?

You can cancel your health insurance on EMI within the free-look period and get a refund minus the pro-rata risk premium, stamp duty, and any medical test charges. Insurers allow cancellation of health insurance even after the free-look period (only if no claim was made), but they refund only the unused risk premium (pro-rata).

Can I switch from EMI to an annual payment mid-policy term?

Usually, no. Most insurers let you change the payment frequency at renewal, not in the middle of the policy year. If you want to switch, plan it for your next renewal cycle and confirm the process with the insurer.

Is “no-cost EMI” really free?

Not really. The interest cost is usually recovered indirectly through hidden mark-ups, lost upfront discounts, processing fees, or GST on charges. The only real benefit is smoother cash flow, not savings.

Can I get health insurance on EMI without a credit card?

Yes, if the insurer or platform supports UPI AutoPay/e-mandate installments (not lender EMI). IRDAI allows premium installment options, but availability depends on the insurer and product.

Will EMI work if I buy the policy through an agent or aggregator, or only on the insurer's website?

It depends on the channel and insurer. Insurer installments are usually available only where the insurer (or platform) supports e-mandates, while credit card EMI depends on whether the payment gateway and your bank allow EMI conversion for that transaction.

Last updated on: 21 Feb, 2026