Should you go for long-term medical insurance?

The one-stop answer to such issues is a complete medical insurance coverage.

A medical insurance plan financially secures your loved ones and your self from hefty medical bills.

“Despite the quite a few benefits of medical insurance, the duty of getting your medical insurance renewed yearly could be cumbersome. To make this course of hassle-free and to scale back the burden of yearly renewal, many insurance coverage firms provide long-term medical insurance insurance policies,” stated Amit Chhabra, head – medical insurance, Policybazaar.com.

“Long-term medical insurance insurance policies principally give you protection for a couple of yr. In India, there are insurance policies which give you the selection of steady protection for 2 or three years,” stated Gurdeep Singh Batra, head – retail underwriting, Bajaj Allianz General Insurance.

Let us now take a look at the benefits of shopping for long-term medical insurance.

No renewal worries: Renewing your medical insurance coverage yearly is a crucial monetary job you must do. “Once you purchase long-term insurance coverage, you’re freed of the concern of coverage renewal for 2 to a few years. In the case of a regular medical insurance coverage, you would need to put aside some cash for yearly renewal; additionally default of cost would end in cancellation of coverage,” stated Chhabra. A protracted-term medical insurance coverage thus comes with extra peace of thoughts.

Discounted premium: Long-term insurance policies are cheaper than annual insurance policies as long-term low cost is utilized on premium paid for a number of years collectively.

“Depending on the corporate you propose to go for, the premium for a two-year coverage can vary from 1.8x to 1.9x of single yr premium. Similarly for a three-year coverage, the premium vary might be between 2.7x and a couple of.8x of single-year premium,” stated Harshad Chetanwala, co-founder MyWeathGrowth and a Sebi-registered funding adviser.

Also, below long-term medical insurance plans, your premium will get locked for 2 to a few years and turns into proof against revision in costs. “The fixed enhance in medical inflation is likely one of the most vital the explanation why folks as of late are searching for long-term medical insurance plans,” stated Chhabra.

Let us take the instance of Health Guard Policy supplied by Bajaj Allianz General Insurance. In case of a Platinum Plan for one particular person from Zone A, with inception of coverage at 32 years, and a sum insured of ₹5 lakh, the premium for a one-year plan is ₹10,600; for a two-year plan (age 33 years), it’s ₹20,352 and for a three-year plan (age 34 years), it’s ₹29,256. Thus, a long-term coverage low cost of 4% is relevant if a coverage is opted for 2 years and of 8% if a coverage is opted for 3 years.

Long-term medical insurance plans may make sense for you in sure conditions. “Usually, medical insurance premium charges are set as per age vary, the place the premium will enhance whenever you transfer from one age vary to a different, say, from 36-45 to 46-50. Here, in the event you go for a two-year or three-year coverage on the age of 45, there may be cheap financial savings in long-term plans,” stated Chetanwala.

View Full ImageParas Jain/Mint

However, even with discounted premiums, whenever you go for a long-term medical insurance plan, it’s important to fork out a bigger one-time quantity. The same increased quantity must be deliberate for each two to a few years. Hence, you must plan accordingly.

“Additionally, insurers provide the choice of cost of medical insurance premium in instalments,” stated Batra.

Tax issues: Health insurance coverage premiums are eligible for deductions below Section 80D of the Income Tax Act. “As per authorities pointers, the place medical insurance premium is paid for a number of years in a single yr, the deduction shall be allowed proportionately over time for which the good thing about medical insurance is obtainable, topic to the boundaries of deduction as prescribed by Section 80D,” stated Batra. So, you can not declare your complete premium paid below Section 80D however solely a proportional quantity each monetary yr.

Coverage given by a long-term coverage isn’t very totally different from what an annual coverage provides. The differentiating elements would be the tenure of the coverage and the long-term low cost supplied on complete premium. “My recommendation for purchasing any medical insurance coverage is that you need to test the coverage phrases and circumstances, perceive what is roofed and what’s not. Opt for a coverage primarily based in your requirement and healthcare wants,” stated Batra.

Subscribe to Mint Newsletters * Enter a sound e-mail * Thank you for subscribing to our e-newsletter.

Never miss a narrative! Stay related and knowledgeable with Mint.
Download
our App Now!!