As the cost of quality healthcare continues to rise every day in India, most average middle-class families in India are left with looking for affordable solutions.
Authored by Amit Chhabra
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As the cost of quality healthcare continues to rise every day in India, most average middle-class families in India are left with looking for affordable solutions. Today, one single encounter with the hospital can drain off your financial savings to a large extent.
To cater to this problem, people are continuously looking for economical ways to deal with medical issues, without burning a hole in their pockets. One-stop-solution to such problems is a comprehensive health insurance policy. And with a spike in unexpected diseases like COVID-19 and a rise in uncertainty, its high time people realize the importance of health insurance plans.
A health insurance plan financially secures you and your family from hefty medical expenses that may incur due to hospitalization. Though, despite the numerous advantages of health insurance, the task of getting your health insurance renewed every year can prove to be cumbersome.
To make this process hassle-free and reduce the burden of yearly renewal, many insurance companies offer long-term health insurance policies.
What is a long term insurance plan?
Long-term health insurance plans have a tenure of two to three years. So, instead of buying a health insurance plan that is valid for 12 months, you can lock up your coverage for 2-3 years. The long-term health insurance plan will be an alternative to the regular one-year health insurance policies that will continue to be available.
The main reason to get a long term plan is the premium stability which helps the policyholder to live a stress-free life as far as the health expenses are concerned.
Discount On Premium
The constant increase in medical inflation rate is one of the most important reasons why people these days are looking for long-term health insurance plans. Under long term health insurance plans, your premium gets locked for 2-3 years and becomes immune to any revision in prices.
Moreover, if you choose to buy a long term health insurance plan, you get a discount of 10 – 15 percent on the premium from the insurer. Though the discount varies from insurer to insurer.
For instance, if you buy a Religare’s NCB Super Premium plan family floater plan for 2 adults and 1 child (Male: 35, Female: 33 Child: 3) with Rs. 10 lakh sum insured, the premium for 1 year would be Rs. 18,091. However, if you choose to buy the plan for 2 or 3 years, you will have to pay Rs. 33,468 or 48,846 respectively. This means, by buying the policy for 2 years, you save Rs. 2,306 on premium and Rs. 4,612 if you buy the policy for 3 years.
No Worries About Renewal Every Year
Yet another important reason and obvious reasons for having a long term health insurance plan are to do away with yearly renewals. Once you buy long term insurance, you are free from worrying about renewing the policy for the next 2-3 years.
On the flip side, in a usual health insurance plan, you would have to set aside some money for yearly renewal and forfeit of payment would result in cancellation of the policy. However, under a long term health plan you do not have to every year for the renewal.
Helps You To Save More Tax
Long-term health insurance is a basic essential that can also help you with your tax savings. As per section 80D of the Income Tax Act you get to enjoy a tax deduction on the premium you pay. So, if you get a health plan for yourself and your parents, then you could enjoy tax exemption up to Rs 50,000. The entire amount you have spent on buying the insurance policy can be claimed under the income tax rebate.
Protection For A Long Time
Every health insurance plan differs when it comes to pre-existing conditions. Any form of health issues that occurred throughout the progression of your current policy, and for which you have taken medicine and consultation would be considered under a pre-existing health condition by the current insurer. Some of the pre-existing conditions include diabetes, cancer, blood pressure, and fertility issues.
In your new health insurance plan, such as pre-existing health conditions are excluded from your features and covers which means that you will not get any compensation for the treatment of these conditions.
However, in such a situation the best, and most cost-effective option is to choose quality, long term health insurance plans. Moving under such a plan suggests that the insurer is bound to cover for any of the medical circumstances that you have diagnosed during the plan.
Amit Chhabra is Head - Health Insurance, Policybazaar. Views are personal