August 5, 2022
  • August 5, 2022

Should you buy a multi-year health insurance policy?

By on July 20, 2022 0

Personal finance

oi-Roshni Agarwal

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The multi-year health insurance policy is the new realm and similar to term insurance and other insurance that you purchase, you can now purchase health insurance coverage spanning multiple years. So, some companies now also offer 2-3 year coverage, and at the end of the term, you must renew the policy to continue to have health coverage against costs.

Should you buy a multi-year health insurance policy?

Advantages of benefiting from such extensive medical coverage

Lower premium: For the extended period, if you buy the health coverage, you can get the same at a reduced cost compared to what you pay year after year. Also, it should be noted that unlike auto insurance or the like, there may be an instance of the premium increasing from year to year based on rising inflation. In addition, this premium is fixed and thus avoids the policyholder having to otherwise increase the premium each year.

Less hassle: When it comes to these plans, you don’t need to remember the length of the policy and worry about renewing the same one year after year. There is also a plan offered that allows the insured to renew the policy at any time in their lifetime. Also, mental health issues are now offered as part of these plans.

Waiting Period: Here, such a plan also eliminates the otherwise required waiting period on every renewal.

Extensive medical coverage: Like regular health insurance plans, these plans also provide comprehensive medical coverage. Also, you can opt for supplemental plans for additional medical coverage.

Tax Benefits: Similar to regular plans, these plans also provide a tax deduction for the premium paid for health insurance under Section 80D. Thus, an individual taxpayer can derive a benefit of up to Rs. 50,000 for the premium paid annually. So, with such a policy in place, the insured need not worry about the effectiveness of the policy for just the first year of the health insurance plan. However, you can choose to claim it year by year. For example, if you paid Rs. 50,000 for a five-year policy, the amount of tax deduction you can avail per year will be Rs. 10,000.