The main purpose for purchasing health insurance is to be able to afford the best available healthcare facilities during medical emergencies without having to worry about money. So, the last thing you want in this situation is for your insurance company to abandon you.
Therefore, you should be well aware of the policy's inclusions and exclusions. It is also critical to understand when to renew it. Failure to renew on time might be a costly financial blunder. Purchasing a multi-year health insurance policy can be beneficial if you are prone to forgetting to renew services on time. Let's discover more about the multi-year health insurance plan and whether it's right for you.
What is the definition of Multi-Year Health Insurance?
As the name implies, a multi-year health insurance policy will keep you covered for more than one year. When you purchase coverage, you have to pay the premium all at once. You won't have to worry about renewing it every year like you would with annual health insurance. Multi-year health insurance is a far more convenient and cost-effective long-term alternative to annual health insurance.
Reasons to Choose a Multi-Year Health Insurance Policy
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Long-term plan discounts:
When you buy multi-year health insurance, insurance companies normally give you a discount. A 2-year policy can save you up to 10% on premiums, and a 3-year policy can save you up to 15%. You will save a lot of money in the long run because these plans have a lifelong renewal option. The best thing is that the discount will be valid for the duration of the insurance.
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Prepaid premium:
As medical expenses rise, insurers raise their premium rates from time to time. However, in multi-year policies, the premium remains constant throughout the policy's term. For example, if you purchased the policy for three years and paid a one-time premium, you won't have to worry about premium increases every year.
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Advantage of lock-in:
The premium amount rises with age. This indicates that a 40-year-old will pay 30-40% more than a 30-year-old. If you pay multi-year premiums in one lump sum, the premium amount is locked in for the next 2-3 years. Any changes to premium rates will have no effect on you.
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Annual tax breaks:
Section 80(80D) of the Income Tax Act of 1961 allows for a tax break of up to INR 25,000 on annual health insurance premiums paid in a year for self, spouse, and children. However, in the case of multi-year health insurance coverage, you cannot claim the entire premium amount at once. To receive the tax benefit, the one-time premium you paid will be proportionately divided. For example, if you pay a premium of INR 60,000 for three years, you can claim up to INR 20,000 every year for three years.
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No difficulties with renewals:
This is a huge relief. Purchasing insurance for an extended period eliminates the requirement for annual renewals and eliminates the need to set aside money each year. There is no risk of losing coverage benefits if you do not renew on time. However, this is not the case with an annual policy. In that instance, if you have a medical emergency and your insurance has expired, your insurer would not pay a single rupee. You will be responsible for all charges.
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EMI advantage:
If you believe the one-time premium payment is too expensive, consider paying in installments. You can also choose the frequency of payments based on your needs. The IRDAI has issued a rule allowing customers to pay premiums in EMIs, making the coverage more accessible and affordable to everybody.
Conclusion
MULTI-YEAR HEALTH INSURANCE COVER is inexpensive and provides financial security for an extended period of time. This is a good alternative if you don't want to deal with renewal headaches every year and can afford to pay the cost all at once.
A comprehensive plan with a large sum covered will also provide superior protection. However, it is always a good idea to discuss the terms and conditions with your insurer to avoid any surprises during claim settlement. Whether you have a multi-year or annual plan, make sure you have adequate health insurance.