Five Things To Know About Multi-Year Health Insurance Plans
Health is most important for people despite knowing that fact, a considerable proportion of the Indian population does not realise the significance of protecting their greatest wealth—health. According to NITI Aayog 2021 report, around 30 per cent or 42 crores of people is bereft of any kind of health insurance.
However, ever since the COVID-19 outbreak, Indians have become more mindful of crises pertaining to their health. Therefore, there has been a growing sense of awareness around health insurance amid rising medical inflation and financial uncertainty.
Generally, most people opt for an annual policy that needs yearly renewal. However, there’s a much more convenient, cost-effective and relatively lesser-known alternative to this – multi-year health insurance policies that are steadily gaining popularity. Recent industry data suggests that around 23 per cent of policyholders are now buying multi-year health insurance policies compared to 17 per cent in 2020-21, witnessing a spike of about 35 per cent as of June 2022.
Premium Lock-in Edge
Multi-year policy is the only way that helps you shield against premium revision and medical inflation. By selecting this plan, you can lock in the premium for a longer time period.
Make The Best Of Discounts On Multi-Year Plans
The multi-year policy is cost effective that makes it most preferred reason for buyers. Under this policy one can avail up to 10 per cent discount for two-year policy while in three-year policy, one can avail 15 per cent. The gains are substantial in the long run because these plans come with a lifelong renewal option.
No Hassle Of Yearly Renewal
You can stay covered for longer period by choosing multi-year health insurance policy as other health insurance plan needs to be renewed every year. Since the grace period is not covered, you will have no shield even if you recall the deadline during the grace period. Thus, during this period, if a medical emergency strikes, you will have to bear the expenses on your own, as the claims will not be valid.
If discount is one aspect that makes purchasing the multi-year policy easier on your pocket, then the IRDAI-directed EMI option only makes it smoother. Moreover, the frequency of instalments to pay the health insurance premium in EMIs can also be as per the policyholder’s preference. If the accumulated amount of two or three years is a concern for you, just opt for the EMI option. This makes it more convenient and reasonable for people to procure the policy.
In this plan too, the policyholder can avail of tax benefits under Section 80D of the Income Tax Act for up to INR 25,000 on the health insurance premiums paid for themselves, their spouse, and children. What’s different with multi-year plans is that if you opt for a one-time payment for all your premiums in a single year, you won’t be able to claim tax rebates all at once. Rather, you will have to claim a proportional amount every year according to the tax regulations. Let’s assume you pay INR 30,000 premium for three years, then you can claim up to INR 10,000 each year for three years.