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What is Single Premium in Health Insurance?

If you have a lump sum set aside, you can invest in the best single premium health insurance policy. Read on to know more.

  • 7,492 Views | Updated on: May 22, 2024

It is our basic instinct to prepare for all the scenarios that we may face in life. We do this to protect ourselves and our loved ones from the unpredictability of this beautiful journey that we call life. Similarly, investing in a health insurance policy is one such preparation that we make.

A health plan is a tool specially designed for unforeseen medical emergencies. Like any insurance scheme, a health insurance policy is maintained by the payment of premiums to the insurer or the insurance company and one can purchase health insurance online or offline. Whenever you make an investment, you want to have some flexibility when it comes to premium payment options. As per your convenience, you can choose one that suits you the best.

A health plan offers various payment options and these include:

One-time premium policy

Here you can pay the premium at the beginning of your health insurance policy term and enjoy the full term of the health plan hassle-free. If you have a lump sum set aside, you can invest in the best single premium policy.

Limited pay premium policy

You can purchase the policy and pay a premium only for a certain period of that entire term and still enjoy the benefits of the policy.

Regular pay

This is a popular payment method in most term insurance plans. Regular pay options in a health insurance policy are premium payments that are to be made usually till the end of the term at a fixed interval. Additionally, ever since the pandemic, payments in instalments have also become available to make health plans more affordable.

A health plan, whether it is regular, limited, or single premium health insurance in India, is eligible for tax deductions under section 80D of the Income Tax Act of 1961. The tax deductions are Rs. 25,000 for people who are not senior citizens and Rs. 50,000 for those who are. A one-time premium policy is eligible for a rebate and is calculated accordingly. This is done by dividing the premium paid by the number of years for which the policy is valid. However,even in this case, the exemption will remain the same in its amount.

Single premium health insurance in India is recommended for those who have a lump sum amount with them. You can also invest in it if you have a steady flow of income now but are not sure of the same after a few years. A one-time premium policy will help manage expenses in the years to come as you will not have to calculate or create a budget for the entire term of the policy or for the years that you do wish to pay the premium.

The premium for health insurance online and offline can be calculated using the premium calculator that shows you the amount after adding a few details related to the sum assured,
age, lifestyle, etc. Also, a calculator for health insurance online helps you gauge the amounts for various policies so that you can compare and choose the best one for yourself.

While calculating the premium and choosing the payment options is an important aspect of buying a health insurance policy, one more important aspect is the factors that affect the premium amount that you have to pay. They are -

  • Age: Usually the premium for those who buy health insurance at a younger age is lower because as you get older, you are more at risk of being prone to health issues.
  • Medical history: Having a history of illness will have a higher premium.
  • Lifestyle habits:Habits like smoking have a great role to play in your premium as they determine your risk of illness and therefore, the premium is likely to be higher.

It is advisable to be absolutely transparent with your insurer to ensure that you can get the best and avail all the benefits of your health insurance. A health plan is a critical aspect of your financial planning, and you deserve the very best one for you and your loved ones!

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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