However, customers must keep in mind certain conditions. For instance, the total premium in case of EMI will be higher as compared to paying the entire premium upfront. Also, the facility is available only for sum assured above a certain amount and in some cases for longer-term policies. Also, you will also lose out on the discount you would have got in case you paid the premium for a longer-term policy at one go.
Future Generali offers the EMI option for policies with sum assured of Rs 3 lakh and more. The loading of premia for EMI options is as follows: three per cent for half yearly, four per cent for quarterly and five per cent for monthly options. As against this, in case of a three-year policy, the discount is 10 per cent if you pay the premium up front and in case of a two-year policy, it is 7.5 per cent. So, if you opt for a three-year policy and choose to pay monthly EMI, you end up paying 15 per cent higher premium as compared to paying the entire premium up front.
Earlier, customers who wanted higher sum assured, but could not afford the high premium used to pay through credit card and pay credit card dues through EMI. However, this is expensive as interest rates on credit cards are high.
In case of Reliance, the EMI option is available on both one and two-year policies, which have sum assured of Rs 3 lakh and above. The EMI option is available on a quarterly and half-yearly basis.
In case there is a claim before the entire EMI is paid, the remaining EMIs for the year will be deducted before the claim is paid. Assuming you opt for the monthly EMI option of Rs 2,000 a month and you make a claim of Rs 2 lakh after paying EMI for eight months, the EMI for the remaining four months, which is Rs 8,000, would be deducted from your claim amount of Rs 2 lakh.
Source: Business Standard
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