6 Reasons Why You Should Buy Multi-Year Health Insurance

Posted on: Aug 25, 2022 | | Written by:

6 Reasons Why You Should Buy Multi-Year Health Insurance

The biggest reason behind buying health insurance cover is to afford the best possible healthcare facilities during medical emergencies without worrying about money. So, the last thing you want in this situation is your policy bailing out on you and leaving you in the lurch. Therefore, you should be well-aware of the policy’s inclusions and exclusions. Also, knowing when to renew it is extremely crucial. Missing the renewal deadline can be a fatal financial mistake. If you are someone who forgets to renew services on time, buying a multi-year health insurance policy can help. Let’s learn more about the multi-year plan and if you should opt for it.

What is Multi-Year Health Insurance?

As the name suggests, a multi-year health insurance cover will keep you covered for more than one year. You need to pay the premium in one go at the time of buying the policy. This way, you won’t need to worry about renewing it every year like in case of annual health insurance. Multi-year health insurance is the long-term alternative to annual health insurance and is much more convenient and economical.

Reasons to Opt for a Multi-Year Health Policy

1. Discount on long-term plans:

Insurance providers usually give discounts if you opt for multi-year health insurance. For a 2-year policy, you can avail discount of up to 10% on the premium amount and up to 15% for a 3-year policy. You will save a substantial amount in the longrun because these plans come with lifelong renewal option. And the best part is that the discount will be applicable as long as the policy continues.

2. Fixed premium:

With medical expenses increasing, insurers are also hiking their premium rates from time to time. However, in multi-year policies, the premium remains fixed throughout the duration of the policy. For instance, if you have bought the policy for 3 years and have paid one-time premium upfront, you don’t need to worry about the rise in premium every year.

3. Lock-in advantage:

As you age, the premium amount increases. This means a 40-year-old will pay 30-40% more compared to a 30-year-old. If you choose to pay multi-year premiums in one go, the premium amount will be locked in for the next 2-3 years. Any revision in premium rates will not impact you.

4. Yearly tax benefits:

Section 80D of the Income Tax Act provides tax deduction of up to INR 25,000 on the annual health insurance premiums paid for self, spouse and children. But in multi-year health insurance cover, you cannot claim the entire premium amount at once. The one-time premium that you have paid will be proportionately divided to avail the tax benefit. For instance, if you pay INR 60,000 premium for 3 years, you can claim up to INR 20,000 every year for 3 years.

5. No renewal hassles:

This is a great relief. Buying a policy for an extended period saves you from annual renewal hassles and you don’t need to keep aside some amount every year either. There’s no fear of losing the coverage benefits if you fail to renew it on time. But this is different for an annual policy. In that case, if there’s a medical emergency and your policy has expired, your insurer will not pay a single rupee.Everything will be out-of-pocket expenses for you.

6. EMI benefit:

If you think the one-time premium amount is not affordable, opt for EMI. You can also decide the frequency of instalments as per your convenience. This is a directive by the IRDAI to allow customers to pay premium in EMIs, thereby making the policy accessible and affordable for all.

Conclusion

Multi-year health insurance cover is cost-effective and secures you financially for an extended period. If you don’t want to go through renewal hassles each year and can afford to pay the premium at once, this is a wise option. A comprehensive plan with a high sum insured will ensure better protection too. However, it is always good to discuss with your insurer about the terms and conditions to avoid any surprises at the time of claim settlement. Whether it is a multi-year or annual plan, ensure you are secured with the right health insurance.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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