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Are Health Insurance Plans a Short-Term Investment?
A health insurance policy means different things to different individuals. For some it is an investment, for others a protective blanket while many consider it to be a tax-saving instrument. But one sentiment runs as an undercurrent in all these meanings and that is peace of mind. A health insurance policy protects your finances from the effect of any medical emergency and thus secures peace of mind.
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- Are Health Insurance Plans a Short-Term Investment?
So, a health insurance policy is a very important and a very essential part of everyone’s financial planning. Having said this, many of us commit grave mistakes when buying and continuing a health insurance cover.
Having limited knowledge of the plan’s continued benefits; many of us err when dealing with our health insurance plans. A common mistake is holding the plan for short-term and not renewing it continuously.
Most of you must be agreeing with my statement. Having your heart in the right place, you buy a health insurance plan for yourself and your family. You are happy with the coverage provided and the tax implications that ensue are considered a free meal.
However, being a short-term plan, renewing it every year is not done zealously and many of us lapse our policies after only continuing it for a couple of years. A financial crunch or a lack of motivation to renew the plan (since health plans do not always provide an immediate benefit) are some common reasons why a health plan is given up. Is the practice correct? Are health plans a short-term investment?
No, they are not. A health plan is not for the short-term and should be renewed every year. The reasons are simple to understand –
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The benefits – Your health plan proves beneficial when you suffer any hospitalization and huge cost implications.. Your plan pays for the bills and you are spared the financial repercussions. When the need would actually strike is uncertain and so holding on to your plan would be wise. You might feel that the premiums paid are not fetching you anything for every claim-free year, but, on the contrary, you accumulate the No Claim Bonus which increases your coverage at the same premium. When you actually face a claim, the coverage provided far outweigh the premiums you have paid.
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No Claim Bonus – As mentioned above, for every claim-free year, you are entitled to a No-Claim Bonus which is cumulative in nature. If you lapse your policy, your accumulated No Claim Bonus also lapses and you lose out on the benefits
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The waiting period – When you buy a plan, your pre-existing ailments are excluded from the cover for a specific period called the waiting period. This period usually ranges from 2-4 years. If you ditch your best health insurance plan, the tenure that you have already spent in the waiting period would be lost. If you buy another plan after some years, you would again need to go through the the waiting period of the plan.
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The coverage – If you are wise enough to buy a plan when you are young, you avail of a comprehensive coverage. If you forego the plan eventually and then try and buy another plan in your older ages when you would actually require the cover, the coverage would be limited. The company would impose multiple restrictive clauses on the diseases you suffer from and you would have to compromise on the coverage. Continuing a plan for a longer tenure is the only way to ensure a continued comprehensive coverage.
A health insurance plan is not a short-term investment. It should be renewed every year and with the lifelong renewability feature available in all plans today, it becomes easier to continue your coverage in the old age too. So buy a plan and hold on to it.
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Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in
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*We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30- minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881.
*Product information is authentic and solely based on the information received from the Insurer. Policybazaar is acting only as a facilitator and claims settlement shall be at the sole discretion of the Insurer. Policybazaar does not provide any medical or surgical advice or diagnosis and is not responsible for your interactions / treatment by a medical practitioner/hospital. Please consult a registered medical practitioner for any medical or surgical advice. The Information that you obtain or receive from Policybazaar, and its employees, or otherwise on the Website is for informational purposes only. As per the Insurance guidelines, you are allowed to cancel the policy with-in 30 days from the date of Issuance of policy.This option is available incase of policies with a term of one year or more.
*All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.
**All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws. GST Exemptions depend on fulfilment of qualification criteria and submission of relevant documents.
*₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.
*₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases
*₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases
*₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases
*₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases
*₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.
*₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.
*No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.
*The values taken for effective cost calculation are indicative values and may change as per the selected plan.
*Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.
*Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.
*The scope of coverage may vary from plan to plan.
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Tax Benefits are subject to changes in tax laws. GST Exemption depends on fulfilment of qualification criteria and submission of relevant documents as required by the insurers. For more details on risk factors, terms and conditions, please read the sales brochure and applicable rules and regulation carefully before concluding a sale.
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