Everybody now needs health insurance to cover any medical emergencies due to the rise in medical costs. By paying the renewal premium, you can purchase health insurance for a year and continue renewing it yearly. However, you can do away with the requirement to renew the coverage each year using multi-year health plans. But does it make sense?
Insurance experts say that multi-year health plans make sense because you’ll presumably need health insurance for a very long time. It has several benefits but also some drawbacks. Let’s look at it:
Advantages Of A Multi-Year Policy
Concessions on existing premiums and protection from increasing premiums throughout the insurance policy are two benefits of multi-year policies.
The multi-year policy also has simple EMI alternatives and does away with the mandatory waiting period for comprehensive policy renewals. A multi-year health insurance plan typically protects for three years. This protects the insured against future premium adjustments because the premium can be paid in one lump sum for numerous years. By choosing multi-year health plans, you may completely remove the possibility that your insurance will expire if you forget to pay the renewal premium. ^
Problems With Multi-Year Policies*
The main drawback of purchasing a multi-year coverage is that you are trapped with a single insurer for an extended period. You won’t be able to change insurers after purchasing a multi-year health policy until the policy term is over. The next solution is to get new insurance from a different insurer before the current one expires.
Under Section 80D of the Income Tax Act, the premium for multiyear health plans is deductible from income. To receive the tax benefit, the premium must be proportionately divided for each year. **
Who Ought To Purchase A Multiyear Policy?
Both annual and multi-year health insurance policies offer the same kind of coverage. However, those who wish to avoid the headache of regular policy renewals while still saving on the cost may be better off with multi-year health coverage.
At times, it can be very challenging for consumers to remember when their insurance plans need to be renewed. No policyholder would want their coverage to expire or result in severe fines. Hence they must remember to renew their health insurance online.
- Purchase annual health insurance policies from general and independent health insurers.
- The insured has been committed to the insurer for three years.
- Insurance companies provide reductions for multi-year premiums.
- Section 80D of the Income Tax Act allows tax benefits for the premium paid. **
- It does away with the necessary waiting period for comprehensive policy renewals.
- Although multi-year insurance offers several benefits, it is important to carefully assess the terms and conditions and the information.
A health insurance premium calculator is a simple and convenient tool you may utilise online to check the amount of coverage required based on your needs.
^ Claims are subject to terms and conditions set forth under general health insurance policy .
*Standard T&C Apply
** Tax benefits are subject to change in prevalent tax laws.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.