The Buyt Desk
To meet health emergencies in India, the insurance market has noticed significant growth over the past years. In one of the latest reports, India is considered to be the 6th largest insurance market in the coming years. Health insurance is greatly supporting this rapid growth. The increase in the Indian health insurance market is making people realize its importance during medical emergencies. Before you buy any health insurance policy, you must know its inclusions and exclusions. If remembering the renewal date of your health insurance policy is a task then opt for a multi-year health insurance policy.
What is a multi-year health policy and how it works?
As the name indicates, this is a health insurance policy that will keep you covered for over one year (mainly a two or three-year policy term). These long-term policies provide coverage for an increased duration. Insurance companies provide this insurance policy to allow policyholders to pay the premium in one go while purchasing the policy. This helps them in enjoying the plan advantages for an extended period without worrying about renewing it every year as with a typical annual plan.
Benefits of buying a multi-year health insurance policy
Compared to traditional annual health insurance, multi-year health insurance provides a long-term alternative that is more economical and convenient. A multi-year insurance policy comes with several perks including the following –
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Locking Premium
With multi-year health insurance, you’ll get a fixed premium for longer tenure.You pay the premium for all the years at one go. Hence,any kind of premium revision will not have an impact on your pocket.
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Long-term policy discounts
Most insurance companies provide up to 10% discount on a multi-year health policy tenure of 2 years and up to 15% for a 3-year tenure. Since this policy comes with a lifelong renewal option, you’ll enjoy substantial amount savings in the long run.
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No stress of annual policy renewal
Renewing a policy is no longer a challenging task today as there are so many digital policies and applications that ease this process. But, so many people are not able to renew their health insurance policies each year. Thanks to the multi-year policy that provides a one-time durable solution with no need for periodical renewal for the policy duration.
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Annual tax benefits
According to Section 80D of the Income Tax Act, a policyholder gets a tax deduction of up to Rs 25,000 on the annual health policy premiums paid for themself, their spouse, and their kids. In a multi-year health policy, you can’t get the whole premium at once. You can get the tax benefits because a one-time paid premium will get proportionately divided.
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Less maintenance
An annual health policy needs to renew annually. So, a policyholder has to renew it every year to keep the plan active. Ignoring this need will result in policy lapse and losing several benefits. A multi-year health insurance plan, on the other hand, provides constant coverage without any hassle and stress of maintenance.
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Easier EMI
Just like an annual health insurance plan, policyholders of a multi-year health insurance policy can pay the premium in easier installments at their convenience. This helps in avoiding the need to arrange the premium amount for a specified duration in one go. You can decide to pay the premium amount in quarterly, annual, monthly, and semi-annual installments.
Who can get the multi year health policy?
The coverage nature remains the same for annual health and multi-year health insurance plans. However, you can consider purchasing a multi-year health policy if you wish to prevent the need for annual renewals of policies while saving on your premiums. A multi-year policy is the right choice if you don’t want your plan to lapse or result in heavy penalties.
You can purchase a multi-year health insurance policy after choosing the best plan according to your requirements. Compare multiple similar plans to choose the right one. Select a comprehensive plan having a high sum insured to enjoy better protection.
Although this policy has numerous benefits, experts recommend carefully going through all the essential documents and terms and conditions (T&Cs) to get aware of all inclusions and exclusions. This will help you in preventing last-minute surprises while claiming settlement during any medical emergency.
