By Amit

Copyright thehindubusinessline

Health insurance in India has always carried the weight of necessity, but affordability challenges have made it hard for many to sustain coverage. Rising medical costs have made it indispensable, yet many families hesitate to purchase policies because of affordability concerns and rigid payment structures. The landscape is changing.

A new wave of flexible payment options and modular products is making health insurance more accessible, to urban households and middle – and lower-income groups across the country.

Traditionally, health insurance premiums were expected to be paid annually, placing a significant burden on households to set aside a lump sum.

Payment plans

Today, insurers offer monthly, quarterly, and half-yearly payment modes that spread the cost more evenly across the year. This approach mirrors how people pay for mobile recharges, OTT subscriptions, and EMIs, making insurance feel less like a financial hurdle and more like a manageable commitment. By aligning premium payments with cash flow cycles, these flexible schedules are helping families remain insured without straining their budgets.

Flexibility extends beyond payment frequency into the design of the products themselves. Modular health plans allow customers to pick and choose the coverage they need rather than pay for a one-size-fits-all policy. Someone may opt for hospitalisation and critical illness coverage but skip maternity benefits or add OPD (outpatient department) cover and wellness riders, if daily medical expenses are a concern. Policyholders can also adjust deductibles, co-pay options, and preferred hospital networks to lower their premiums further. This mix-and-match approach ensures customers are only paying for what they will use, keeping premiums affordable while enhancing relevance.

Ease of payment is equally important. Health insurance providers are now integrating with the same channels consumers use daily, UPI, debit cards, credit cards, and even auto-debit options. These integrations make premium payments as simple as scanning a QR code or approving a UPI mandate, reducing lapses due to missed deadlines. The familiarity of these platforms also builds trust, particularly among younger policyholders who are digital-first in their financial transactions.

Medical inflation

Another trend is zone-based premiums, where policy costs are linked to the medical inflation and healthcare expenses of specific geographies. A family in tier-2 or tier-3 India no longer needs to pay the same premium as someone in a metro city, where hospital bills are significantly higher. This ensures pricing is fair, region-specific, and more affordable for communities outside major urban centers, thereby broadening the reach of health insurance.

Flexible payments and modular products are reshaping how Indians perceive and purchase health insurance. By removing barriers of affordability and relevance, insurers are expanding their customer base and contributing to wider financial security across society.

(The writer is Chief Business Officer, General Insurance, Policybazaar. Views are personal)

Published on October 6, 2025