Nodal charge | Now health insurance will have to be more expensive in installments

 

The Insurance Regulatory and Development Authority (IRDA) had allowed health insurance premiums to be paid in instalments. Thereafter, the insurance holders had the option of paying premium instalments monthly, quarterly or half-yearly. This was considered a major decision in the interest of insurance holders. However, it is now becoming expensive for the insurance holder. This is because insurance companies are levying 3-4 per cent nodal charge on premium payments through instalments.

 

Such an insurance company is charging a fee in the name of management. According to sources, IRDA has not fixed any limit on this fee. Despite this, many insurance companies are charging an additional 3 to 4 per cent from the insurance holder on premium payments in instalments. Insurance experts say that the insurance company may impose a nodal charge of 2 to 3 per cent to compensate for the expenses incurred on managing EMI and loss of investment potential. Nodal charge is levied to cover the loss of income and financial expenditure from investment. According to an IRDA source, the authority has not imposed any ceiling on the payment of instalments as there is a confidence that market competition will limit it. All companies will allow payment of premium in instalments, so firms are expected not to make much money on delayed payment.

 

To fight an epidemic like COVID-19, insurance companies are trying to create a pool through which to deal with financial problems during the epidemic. Insurance companies can create an emergency program by creating a pool of funds, that is, by raising funds to cover most of the losses due to any epidemic. Funding for this pool can be done through public-private partnerships in which both the government and companies can contribute to this pool.

 

Insurance companies are preparing to go to the Supreme Court against the expensive charge of private hospitals in the name of COVID-19 treatment. COVID-19 has increased the burden of claims on insurance companies. This is because private hospitals are charging fat. Insurance companies are set to go to the Supreme Court for a fixed treatment for COVID-19.