Follow Us:
Thursday, January 27, 2022

Multiple benefits of upgrading to a multi-year health insurance

If you are thinking of buying a health insurance policy or about to renew an existing one, here’s why you should consider opting for a multi-year policy over an annual one.

Updated: January 13, 2022 4:59:18 pm
Just like your regular health plan, long-term insurance too offers you a tax rebate under section 80D. (Representative image, source: Pexels)

Written by Amit Chhabra

Renewing health insurance captures a priority spot in one’s checklist. The recent times have made it quite apparent that health insurance is not something optional. It’s a shield that you need constantly at every time and stage of your life. In such a case, it can be a little cumbersome to renew your health insurance time after time. It is, therefore, prudent to exercise the option of upgrading to a multi-year health insurance policy. This not only saves you the trouble of renewals every year, but also helps you get some great discounts and benefits.

Needless to say, it covers your risk from exorbitant medical bills at all times in case of a medical emergency. If you are thinking of buying a health insurance policy or about to renew an existing one, here’s why you should consider opting for a multi-year policy over an annual one.

Avail discount on long-term plans

One of the greatest advantages of opting for a multi-year policy is getting a discount on the premium. For instance, a 30-year-old living in Delhi can buy a cover of Rs 5.5 lakh, where they will pay a premium of Rs 569 per month on an annual plan and Rs 512 per month on a 3-year plan.

Do you know you can get up to 10 per cent discount when you opt for a two-year health insurance policy and up to 15 per cent discount on a three-year policy? This translates to major savings in the long run when you pay your premium. Not just this, the discount continues year after year for as long as your policy continues. So, it’s highly recommended to opt for a 3-year policy to save more on the premium.

Lock in your premium and save more

This definitely features as another top benefit of a multi-year policy. With the soaring inflation, medical costs go up every year and your policy premium may change. Not just this, your age is an important factor in deciding the cost of your premium. The higher the age, the more the premium cost. Also, at a time when Covid is still lurking around with new variants, the possibility of change in premium is very real.

However, your premium becomes cheaper with the multi-year option because you continue to pay a fixed amount from the beginning of the policy term till the end. So you don’t have to worry about the premium price rise every year as you pay the same premium during the entire policy term.

Ease of long-term coverage without repeated renewals

In a world where it’s hard to spare time, you would want to keep your to-do list short. The last thing you need is missing out on the renewal deadline and losing out on your policy. Not to mention, this also means losing continuity benefits if you fail to renew your policy on time. Even if you remember to renew it in the grace period, do note that the grace period is not covered under the policy. If a medical emergency occurs during this period, you cannot make any claims and will be out on a limb without any cover.

This is where multi-year policy comes to your rescue. You can just buy a policy for up to three years and spare yourself the hassle of annual renewals and the fear of losing out on anything. Also, unlike an annual policy, you don’t need to set aside money every year. Instead, you can make a one-time payment for up to three years.

Get tax benefits every year

Tax benefits are a fundamental part of financial planning. Just like your regular health plan, long-term insurance too offers you a tax rebate under section 80D. However, the only difference is that if you have paid all your premium in a single year, you cannot claim the entire premium amount all at once. You can only claim a proportional amount every financial year as per the government guidelines. Suppose you pay a premium of Rs 60,000 for 3 years in the first year of the policy itself, then you can claim up to Rs 20,000 each year for 3 years. It is recommended that you check the terms and conditions regarding tax benefits thoroughly before buying the policy.

Easy EMI options

The multi-year policy is easier on your pocket in ways more than one. You can choose to pay in installments as per the frequency of your choice. IRDAI has also directed insurers to allow the customer to pay the health insurance premium in EMIs. This makes the policy more accessible and affordable for people across the country.

What to remember before buying the policy

Although the coverage provided in the multi-year policy is not too different from a regular policy, you should always discuss and confirm with your insurer. In a nutshell, you should go for a comprehensive policy that guards you from any unforeseen event. Opt for a policy with a higher sum assured to be prepared for any medical exigency. Also, don’t remember to check the limitations of your plan including room-rent capping and sub-limits. Understand the terms and conditions pertaining to age, pre-existing conditions and more. Comparing various policies online might help you greatly to make an informed decision.


The author is Head-Health Insurance at Views expressed are that of the author.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard