Should you opt for long term health insurance?

One-time solutions to such problems are widespread health insurance Policy.

a health insurance The plan financially secures your family and yourself from heavy medical expenses.

“Despite the countless benefits of health insurance, the task of renewing your health insurance every year can be cumbersome. To make the process hassle-free and reduce the burden of annual renewal, many insurance companies offer long-term health insurance policies,” said Amit Chhabra, Head – Health Insurance, Policybazaar.com.

“Long term health insurance policies basically provide you coverage for more than one year. Gurdeep Singh Batra, Head – Retail Underwriting, Bajaj Allianz General Insurance said, “There are policies in India that offer you the option of continuous coverage for two or three years.

Let us now have a look at the advantages of buying long term health insurance.

No Renewal Worries: Renewing your health insurance policy every year is an important financial task that you need to undertake. “Once you buy long-term insurance, you are free from the worry of policy renewal for two to three years. In case of general health insurance policy, you need to set aside some amount for annual renewal; Default in payment will result in cancellation of the policy,” Chhabra said. Thus a long term health insurance policy comes with peace of mind.

Discounted Premium: Long term policies are cheaper than annual policies as a long term discount is applicable on the premiums paid for several years at a time.

“Depending on the company you plan to go for, the premium for a two-year policy can range from 1.8x to 1.9x the premium for a single year. Similarly for a three-year policy, the premium range The single-year premium could be between 2.7x and 2.8x,” said Harshad Chetanwala, co-founder MyWeathGrowth and a SEBI-registered investment advisor.

Also, under long-term health insurance plans, your premium is locked in for two to three years and becomes immune to price revisions. “The steady rise in medical inflation is one of the most important reasons why people are looking for long term health insurance plans these days,” Chhabra said.

Let us take the example of Health Guard policy offered by Bajaj Allianz General Insurance. In case of Platinum plan for an individual from Zone A, with the commencement of the policy at the age of 32 years, and Sum Assured ₹5 lakh, the premium for one year plan is ₹10,600; For the two year plan (age 33 years), it is ₹20,352 and for three year plan (age 34 years), it is ₹29,256. Thus, a long term policy discount of 8% is applicable if the policy is opted for two years and policy for three years.

Long-term health insurance plans may also be useful to you in certain situations. “Usually, health insurance premium rates are set according to the age range, where the premium will increase as you move from one age range to another, i.e. from 36-45 to 46-50. Here, if you choose a two-year or three-year policy at the age of 45, there are reasonable savings in long-term plans,” Chetanwala said.

However, even with discounted premiums, when you opt for a long-term health insurance plan, you have to pay a large lump sum amount. A similar high amount needs to be planned for every two to three years. So, you need to plan accordingly.

“In addition, insurers provide the option of paying health insurance premium in installments,” Batra said.

Tax matters: Health insurance premiums are eligible for deduction under section 80D of the Income Tax Act. “As per Government guidelines, where health insurance premiums are paid for a number of years in a year, the deduction shall be allowed proportionately in the years for which the benefit of health insurance is available, subject to the deduction prescribed by section 80D. Subject to limits,” Batra said. Hence, you cannot claim the entire premium paid under section 80D, but can claim only a proportionate amount in every financial year.

The coverage offered by a long-term policy is not much different from that of an annual policy. The differentiating factor would be the longer term discount offered on the term of the policy and the total premium. “My advice for buying any health insurance policy is that you should check the terms and conditions of the policy to understand what is covered and what is not. Choose the policy option based on your requirement and health care needs,” Batra said.