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Long-term Health Insurance and Their Benefits

A long-term health insurance policy helps reduce the cost of hospitalization, an assisted living facility or home assistance, especially when one is no longer able to take care of them. As we grow older, one question that comes to the mind is, “Who is going to take care of us when we no longer care for ourselves?”

Health care has become a significant expense with inflation in health care going to 15% in India. At this rate, health care might become a costlier affair. Health insurance is the best, and therefore, highly recommended option to eliminate the odds of a financial disaster in the absence of a backup plan in particular. However, medical institutions or insurance companies consider senior citizens as customers at a high risk.

There are a few exclusions along with some terms and conditions that need to be considered before buying a plan.

What is Long-term Health Insurance?

Long-term health insurance plans, typically, have tenure of 2-3 years. Therefore, as an alternative to health insurance plans that is valid for a year, you can lock up your coverage for 2-3 years. It is an alternative to the regular 1-year health insurance policies that will continue to be available.

Why Should You Consider a Long-term Health Insurance Plan?

The biggest advantage for you as an insurance seeker, when you opt for a long-term health insurance plan, is that you will no longer have to renew your policy every year. These plans are also likely to come with a discounted premium as compared to the 1-year health insurance plans.

When you lock your insurance plan for 3 years, you make yourself immune to rate revisions of the premiums that might happen during the period. Insurance companies are expected to work out and offer discounts for NCB (no-claim bonus) to long-term health insurance policyholders. As the NCB slabs are fixed by the Insurance Regulatory and Development Authority of India (IRDAI), the benefits can be paid in the form of claim-related concessions.

For Instance, the insurance company might offer a bonus to a policyholder for each claim-free year.

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Long-Term General Insurance in India

The chairperson of IRDAI revealed that the regulatory body is working on the details of long-term health insurance. It followed the encouraging feedback received for the long-term two-wheeler insurance plans launched last year.

Why is a Long-term Plan Necessary?

In recent times, there is a growing alertness among Indians of the necessity for health insurance. The increasing healthcare costs and the regular promotion of health insurance by insurance companies are convincing more and more people to consider health insurance as part of their investments. The revised tax rebates on such plans are also promoting the product.

More insurers also mean more paperwork for the companies. This, together with the rising medical costs, is forcing health insurance companies to surge the premiums of long-term health insurance plans. While companies are helpless about the increasing medical expenses, they can only minimize their costs by reducing the paperwork, and then pass on these benefits to their customers.

What about Pre-existing Diseases?

Long-term health insurance plans are likely to cover the existing conditions with a waiting period as per the traditional norms (usually change from one insurer to another). For example, suppose that your policy has a 3-year waiting period, and you have already completed 2 years. Now, if you take a long-term policy during the 3rd year, then you can start claiming for expenses incurred for hospitalization expenses against pre-existing diseases, starting from the 4th year.

Is This Plan Available for Senior Citizens Too?

Unfortunately, health insurance companies consider senior citizens at high risk, and therefore, long-term plans may not be offered to them. However, more details are expected to emerge only after the IRDAI approves such plans. Hopefully, this will happen very soon in the near future.