Buying a health insurance policy is an important investment in today’s times. Think about the rising costs of medical care and increasing instances of lifestyle-related ailments. It is easy to understand why people are opting for the best health insurance plans.
Typically, a health insurance policy has a validity period of one year. This means that you need to renew it every year to keep it active. If you miss renewing the policy, it can lapse, and you can lose any accumulated benefits like NCB. Many insurers offer long-term health insurance plans where people can buy a policy for an extended time and renew it only after the end of the term. In this article, we will talk about a long-term or Multi Year Health Insurance Policy and look at the advantages it offers.
What is a Multi-Year Health Insurance Policy?
A multi-year health insurance plan offers coverage for 2/3 years as opposed to a standard plan that offers coverage only for a year. As people gradually understand the importance of health insurance, they buy it. Some people are also looking for multi-year plans due to the range of benefits they offer.
Benefits of Buying A Multi-Year Health Insurance Policy
● Discounts on premiums
Many insurers offer discounts on premiums for multi-year health insurance plans. While the discounts might vary, the benefits offered are usually a discount of up to 10% for a two-year policy and up to 15% for a three-year policy. If your premium is high, then this can be a sizeable discount.
● No need to renew every year
A standard health insurance policy is valid for one year. Before the year’s end, the policyholder must renew it. Failure to do so can result in the policy lapsing. In such cases, the insurer does not offer any cover. Hence, policyholders need to ensure they do not miss the last date of renewing their health insurance policies.
When you opt for a multi-year medical insurance plan, you do not have to renew every year. If you have opted for a two-year policy, you must renew it once in two years. This helps you get rid of the hassle of renewing it every year.
When you buy a multi-year policy, the premium is fixed for the policy term. If you buy a three-year policy and the insurer offers a quote, the premium will not change for the next three years. High medical inflation rates and increased chances of medical problems with increasing age can be a big boon since you don’t have to worry about annual premium rate hikes.
● Premium payment in instalments
In a standard health insurance policy, you can pay the premium in instalments. Similarly, in multi-year policies, you have an EMI option where the premium for all three years is divided into instalments. Hence, you don’t have to accumulate and pay the premium for three years in a single shot.
● Tax benefits
The premium paid for a health insurance policy allows tax deduction under Section 80D of the Income Tax Act, 1961. When you buy a three-year health insurance plan, you must pay the premium for all three years together or opt for an EMI option. If you pay the entire premium together, you cannot claim the entire sum under Section 80D. You will have to take a proportionate sum for tax benefits.
As you can see, many benefits of opting for a multi-year health insurance plan exist. Hence, if you want to buy a new health insurance plan or renew your existing one, you might want to consider shifting to a multi-year two-wheeler insurance plan. Good Luck!