Should You Upgrade to a Multi-Year Health Insurance Plan?
Ketki Jadhav
Aug 30, 2022
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Medical inflation around the world has been skyrocketing, resulting in expensive medical treatments, medicines, and consultation fees. A medical emergency in a family can deplete all your savings and can even create a huge debt that takes years to clear off. We all have experienced or witnessed the covid-19 battle that some of us won and some others lost. While the pandemic was a lesson to many people about how a medical emergency can put a dent in their finances, it has certainly created awareness about health and people now realise the importance of health insurance. Having sufficient Health Insurance cover is crucial to ensure your financial plan does not get disturbed by unexpected medical expenses.
Most of us buy a Health Insurance Policy on an annual basis. But considering the fact that Health Insurance is a long-term requirement, many health insurance providers have started offering multi-year health insurance plans. They allow you to cover yourself and your family with health insurance for two or more years in one go. But are these multi-year health insurance plans really worth it? And, if you already have a regular health insurance policy, should you upgrade to a multi-year health insurance policy? This article will answer all your questions about multi-year health insurance plans.
What is a Multi-year Health Insurance Plan?
A multi-year health insurance plan is a long-term alternative to a regular annual health insurance plan. As the name suggests, a multi-year health insurance policy provides coverage for an extended duration of two or more years. So, you can pay the premium for the next two or three years and enjoy the health insurance cover for an extended period, without the hassle of renewing it every year.
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What are the benefits of a Multi-year Health Insurance Policy?
1. Discount on the premium:
The multi-year policies often come at a discounted premium compared to annual policies. They offer a considerable discount that typically ranges from 5% to 15%. The additional savings can help you contribute toward your financial goals.
2. Locks the premium:
As you might already know, the health insurance premium increases with the age group. However, buying a multi-year health insurance policy will help you lock the premium for the next two-three years. Furthermore, the cost of medical treatments and other medical expenses is constantly increasing. With a rise in medical inflation and many other factors, health insurers keep revising their premiums. This increase in the premiums in the coming two-three years can be avoided by opting for a multi-year health insurance plan.
3. No hassle of policy renewal every year:
Buying a multi-year health insurance policy eliminates the hassle of renewing the insurance every year. You can buy the policy once and enjoy health cover for the chosen period. Sometimes we forget to renew the policy on time or pay the premium before the due date, which may result in a lapse of the policy. But a multi-year health insurance plan can help in avoiding such difficult situations.
4. Pay in instalments:
Many individuals believe that buying a multi-year health insurance plan requires a huge amount as you have to pay the premium for the next two to three years in advance. However, that is not true! You can buy a multi-year health insurance policy and choose to pay on a monthly, quarterly, semi-annually, annually, or lump sum basis. This helps you save the policy premium while paying equated instalments at your convenience.
5. Tax benefit:
Just like an annual health insurance policy, a health insurance policy offers tax deduction benefits up to Rs 25,000 for the health insurance premiums paid for self, spouse, and children under Section 80D of the Income Tax Act, 1961. You cannot claim the entire multi-year premium in one financial year. However, it allows you to claim a proportionate amount of the premium every year.
Should you upgrade to a multi-year health insurance plan?
As discussed earlier, health insurance is a long-term requirement. Renewing the health insurance policy every year can be one more task in our already busy lives. Many policyholders forget to renew the policy before the due date, resulting in an increased premium due to late payment charges or a lapse of the policy. However, having a multi-year health insurance cover will eliminate the hassle of renewing the policy every year and also give you a discount on the premium for buying the policy in advance for the next two-three years. Hence, it is a good idea to buy a multi-year health insurance policy or upgrade to the same at the time of your policy renewal if you already have a regular health insurance policy.
Warm Regards,
Ketki Jadhav
Content Writer