Should I opt for a Multi-year Health Insurance Policy?
While choosing a health insurance policy, one should opt for a plan that not only protects during medical emergencies but also offers several monetary and time-saving benefits in the long run. A multi-year health insurance policy does just that.
The primary difference between a multi-year health insurance policy and a single year policy is that the former lets you pay a lump-sum premium for coverage that spans several years. If you are wondering whether you should opt for a multi-year health insurance policy, then this article is just for you. Read on to discover 4 major benefits that you enjoy with a multi-year health insurance policy.
- Tax benefits
One of the prime advantages of getting multi-year health insurance are the tax benefits that get evenly spread out throughout the policy period. Under section 80D of the Indian Income Tax Act, you can avail tax deductions on the premiums you pay towards your health insurance for yourself, your dependent parents, spouse, and children.
For a multi-year health insurance policy, the tax deductions on your premium will be decided proportionately for each year. So, if you have paid a premium of Rs 1 lakh for a period of 4 years, then you are eligible for a tax deduction of Rs 25,000 in the first year, Rs 25,000 in the second year, and so on until the fourth year of coverage.
- Stability of premium cost
When you pay a one-time premium for multiple years, you are saved from possible price hikes that may have resulted in a higher premium each year. The premium amount stays the same during the course of your multi-year health insurance.
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- Discount on premium
Paying a large amount in premium for a multi-year policy can be a costly affair. Therefore, insurers sometimes offer a discount on the lump-sum premium to ease things out for you. For instance, if a single-year health insurance policy costs around Rs 4000 each year for coverage, the same policy might come to you for around Rs 10,000 if it is purchased as a multi-year plan for 3 years. That means you save around Rs 2000 on your premium.
- Respite from renewal procedures every year
Multi-year health insurance does not require you to renew your policy every year. In our busy lives, we may sometimes forget our health policy renewal date, leading to lapses in coverage. You could, thus, miss out on several benefits of the policy if the coverage is not renewed before its expiry date. Also, some insurance providers might require you to undergo a medical check-up before your next renewal. Opting for a multi-year health insurance policy can save you from the time, effort, and worry that go into these procedures.
A few things to remember:
If you have considered opting for multi-year health insurance, then make sure that the insurer has these features:
- Extensive coverage for a variety of treatments and procedures
- Coverage for vaccinations, medical check-ups, and tests
- A large network of affiliated hospitals around the country
- High claim settlement ratio
- Reliable reputation and good customer service
Do bear in mind that the features of multi-year health insurance policies will differ from insurer to insurer. It is advisable to consult your insurance provider and go through the policy documents carefully before making any financial decisions.
We hope this article has increased your understanding of multi-year health insurance.