Ever since COVID-19 entered our lives, health insurance has come to the top of our priority list. Most of us buy annual medical insurance that has to be renewed every year. But did you know that you can enjoy a lot of attractive benefits by buying a multi-year health insurance policy? Read on to know why you should upgrade to multi-year health insurance.
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*Tax benefit is subject to changes in tax laws. Standard T&C Apply
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Multi-year health plans are usually available for a policy term of 2 years or 3 years. Check out some amazing benefits of multi-year health insurance plans:
Buying a multi-year health plan allows you to take advantage of the long-term policy discount. Most insurance companies offer a discount of up to 10% on opting for a policy tenure of 2 years. Similarly, you can reduce your premium amount by up to 15% by choosing a 3-year health insurance policy.
For example, if the premium of your annual health insurance policy is Rs 600, you can reduce it up to Rs 540 per annum by opting for a 2-year policy. Similarly, if you opt for a multi-year policy of 3 years, you can reduce your premium up to Rs 510 per annum.
If you have an annual health insurance plan, you need to renew the policy every year so that you get medical coverage at all times. If you fail to renew your policy on time, the coverage on your head will disappear and you will be left to fend for yourself in case of a medical emergency. Besides, you will also lose the continuity benefits like waiting periods and the cumulative benefit if there is a gap in your policy.
But you don’t have to worry about remembering your policy due date every year if you have a multi-year policy. Also, you don’t have to worry about setting money aside to pay the premium every year. All you have to do is pay the premium for 3 years at the time of policy purchase and rest assured for the next couple of years.
Health insurance premiums can rise without any warning, thanks to inflation. Besides, as your age increases, the possibility of a hike in premium also increases as you become more susceptible to age-related issues. Moreover, the constant threat of COVID-19 can also lead to the possibility of an increase in the premium.
But if you have a multi-year policy of 3 years, your premium is locked in for those 3 years. No matter how the world changes around you, your insurance company cannot charge you a higher premium for those 3 years. As a result, you save yourself from annual premium revision and end up saving a lot of money.
Just like an annual health policy, you can also pay the premium of your multi-year health insurance policy in instalments. This saves you from the trouble of arranging the premium amount for 3 years in one go. In fact, insurance companies allow the payment to be made at the frequency of your choice.
This means you can choose to pay the premium of your multi-year policy in annual, semi-annual, quarterly as well as monthly instalments.
You can also avail tax benefits for a multi-year health insurance policy on the premium amount just like an annual policy. However, you cannot claim the entire 3-months premium in the same year. As per government guidelines, you can claim a proportionate amount of the total premium amount every financial year.
For example, if the multi-year mediclaim premium paid for 3 years is Rs 54,000, you can claim a tax deduction of Rs 18,000 per financial year for 3 years under Section 80D of the IT Act.
But do check the current tax policy to know about the terms and conditions before buying a multi-year health policy.
A multi-year health insurance policy is beneficial in ways more than one. You not only end up saving a lot of money but also save yourself from the hassle of renewing the policy every year. So on your next renewal, ditch annual health insurance plans and instead, opt for a multi-year health insurance policy.
Also, make sure to compare different health plans online on Policybazaar.com before renewal to get the best deal.
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