5 things to learn about multi-year medical health insurance plans


‘The best wealth is health’ – this popular quote by Virgil, considered Rome’s best poet, aptly summarizes the fact of life. Despite this, a substantial proportion of the Indian population doesn’t realise the importance of defending their best wealth – their health. As per the NITI Aayog 2021 report, nearly 30 percent or 42 crores of its population is bereft of any sort of medical health insurance. It’s further estimated that the actual numbers could be even higher and unaccounted for. Nonetheless, ever because the COVID-19 outbreak, Indians have change into more mindful of crises pertaining to their health. Due to this fact, there was a growing sense of awareness around medical health insurance amid rising medical inflation and financial uncertainty.

Generally, most individuals go for an annual policy that needs yearly renewal. Nonetheless, there’s a far more convenient, cost-effective and comparatively lesser-known alternative to this – multi-year medical health insurance policies which can be steadily gaining popularity. Recent industry data suggests that around 23 percent of policyholders at the moment are buying multi-year medical health insurance policies in comparison with 17 percent in 2020-21, witnessing a spike of about 35 percent as of June 2022. For those who are on the verge of shopping for or renewing your policy, here’s all that you could learn about multi-year plans:

Premium Lock-in Edge 

Healthcare is a sector that has witnessed major inflation, translating to significantly higher medical costs for the patron every 12 months. As a rule, this has also led to premium hike within the medical health insurance sector. Given this hike, the rising cost might be a problem for the policyholder which will be solved with a multi-year plan. By choosing this plan, you possibly can lock within the premium for an extended time period. Multi-year policy is the one way that helps you shield against premium revision and medical inflation.

Make one of the best of discounts on multi-year plans

Probably the most preferred reason for buyers to opt or switch to a multi-year policy is its cost-efficiency. One stands to avail of as much as 10 percent discount for a two-year policy and as much as 15 percent for a three-year plan. The gains are substantial in the long term because these plans include a lifelong renewal option.

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As an example, a 30-year-old living in Delhi can go for Niva Bupa’s Max Saver Rs 1 crore cover plan for Rs 10,488 annual premium but in the event that they buy a three-year plan, they’ll pay only Rs 29,104, thereby saving Rs 2360. The discount is applicable for so long as long the policyholder wishes it to proceed. This helps them save more in the long term and is a significant incentive to renew the policy.

No hassle of yearly renewal

After purchasing a medical health insurance plan, a vital aspect is to recollect to renew it on time, else the policy gets cancelled. For the reason that grace period will not be covered, you’ll have no shield even if you happen to recall the deadline through the grace period. Thus, during this era, if a medical emergency strikes, you’ll have to bear the expenses on your individual, because the claims won’t be valid. Nonetheless, you possibly can stay covered for longer by properly selecting multi-year medical health insurance, which is usually available for 2 or three years.

EMI  Profit

If discount is one aspect that makes purchasing the multi-year policy easier in your pocket, then the IRDAI-directed EMI option only makes it smoother. Furthermore, the frequency of instalments to pay the medical health insurance premium in EMIs can be as per the policyholder’s preference. If the amassed amount of two or three years is a priority for you, just go for the EMI option. This makes it more convenient and reasonable for people to acquire the policy.

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Tax Advantage

On this plan too, the policyholder can avail of tax advantages under Section 80D of the Income Tax Act for as much as Rs 25,000 on the medical health insurance premiums paid for themselves, their spouse, and kids. What’s different with multi-year plans is that if you happen to go for a one-time payment for all of your premiums in a single 12 months, you won’t have the ability to assert tax rebates . Quite, you’ll have to assert a proportional amount every 12 months based on the tax regulations. Let’s assume you pay Rs 30,000 premium for 3 years, then you definately can claim as much as Rs 10,000 every year for 3 years.

Multi-year policies are an amazing option to top up your savings and strengthen the financial safety net that medical health insurance provides. To make sure higher protection, at all times select a comprehensive plan with a better sum assured. As well as, compare multiple medical health insurance policies online before making a final decision. All the time read the terms and conditions and know the exclusions. There must be no surprises in the long run because battling over the policy is the last item you would like during a medical emergency.

(By Amit Chhabra, Head-Health Insurance, Policybazaar.com)


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