August 30, 2022
Listen Should you switch to a multi-year health insurance plan?
Medical inflation around the world has skyrocketed leading to expensive medical treatments, drugs and consultation fees. A medical emergency in a family can drain all of your savings and can even create a huge debt that takes years to clear. We have all experienced or witnessed the battle against covid-19 that some of us won and others lost. Although the pandemic has been a lesson for many people on how a medical emergency can wreck their finances, it has certainly created health awareness and people are now realizing the importance of health insurance. . Having sufficient health insurance coverage is crucial to ensuring that your financial plan is not disrupted by unexpected medical expenses.
Most of us buy a health insurance policy on an annual basis. But considering 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 mutuals 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 term of two years or more. So you can pay the premium for the next two or three years and enjoy health insurance coverage for an extended period, without having to renew it every year.
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What are the benefits of a multi-year health insurance policy?
1. Discount on premium:
Multi-year policies often come with a reduced premium compared to annual policies. They offer a considerable discount which usually ranges from 5% to 15%. The extra savings can help you contribute to your financial goals.
2. Block bounty:
As you may already know, the health insurance premium increases with the age group. However, purchasing a multi-year health insurance policy will help you lock in the premium for the next two to three years. In addition, the cost of medical treatment and other medical expenses continues to rise. With rising medical inflation and many other factors, health insurers keep revising their premiums. This increase in premiums in the next two to three years can be avoided by switching to a multi-year health insurance plan.
3. No hassle of policy renewal every year:
Purchasing a multi-year health insurance policy eliminates the hassle of renewing insurance every year. You can buy the policy once and get health coverage for the chosen period. Sometimes we forget to renew the policy on time or pay the premium before the due date, which may cause the policy to lapse. But a multi-year health insurance plan can help avoid these predicaments.
4. Pay in installments:
Many people think that buying a multi-year health insurance plan requires a huge sum because you have to pay the premium for the next two to three years in advance. However, this is not true! You can purchase a multi-year health insurance policy and choose to pay on a monthly, quarterly, half-yearly, annual or lump sum basis. This helps you save the policy premium while paying equivalent installments at your convenience.
5. Tax benefit:
Just like an annual health insurance policy, a health insurance policy provides tax deduction benefits of up to Rs 25,000 for health insurance premiums paid for self, spouse and children under the 80D of the Income Tax Act 1961. one-year bonus in a fiscal year. However, it allows you to claim a proportional amount of the premium each year.
Should we switch to a multi-annual mutual?
As stated 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 expiration date, resulting in an increase in premium due to late fees or policy lapse. However, having multi-year health insurance coverage will take the hassle out of renewing the policy each year and will also give you a discount on the premium for purchasing the policy in advance for the next two to three years. Therefore, it is a good idea to purchase a multi-year health insurance policy or to switch to the same when renewing your policy if you already have a regular health insurance policy.