Long Term vs Short Term health Insurance: Which one should you buy?

When buying a health insurance policy, it’s up to you if you want to go for a short-term health plan for 3 to 6 months or a long-term health insurance plan for more than 1-year. The decision should be based on your medical requirements and for how long you want to avail the benefits

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    If you have a long-term health insurance policy like a critical illness plan or a family floater plan it has its purpose to serve. But to meet the coronavirus pandemic insurers have also launched short-term COVID-19 health plans in addition to other short-term plans.

    So, before you buy health insurance online, it is helpful to understand the difference between the two. Here is a comparison between long-term and short-term health plans in India to help you buy a suitable health plan for yourself:  

    Long Term vs. Short Term Health Insurance:

    A long-term medical insurance plan keeps you insured for 2-3 years. And a short-term health insurance plan requires you to renew the policy frequently because it is valid only for a short duration. Here is a table mentioning the differences between these two options:

    Parameter

    Long Term Health Insurance

    Short Term Health Insurance

    Policy Term

    >1 Year

    3 to 6 months

    Premium

    Comparatively Higher

    Comparatively Low

    Renewability

    After policy expiry i.e. 1/2/3 years

    After expiry i.e. 3 to 6 months

    Pre-existing Diseases

    Mostly Covered

    Only in Corona Kavach & Corona Rakshak Plans

    Add-on Covers

    Available

    N/A

    Who Should Buy a Short-term Health insurance policy?

    Short-term health insurance policies are ideal to meet the insurance needs for a temporary phase. Like in case of job change, COVID-19 pandemic, etc. Short-term medical plans help in filling the temporary gap in the medical coverage during the transition phase.

    • The duration in these plans can be 3 months to 1-year
    • They are a perfect option while porting out your health insurance plan, to fill the time and stay insured during the portability period as well
    • The benefit of insuring yourself with a short-term health plan is that you no longer need to worry about any unforeseen medical emergency during that period
    • For students who come here to study for a shorter duration, and NRI’s or Non-Resident Indian, short-term health plans make sense

    But if we talk about Corona Kavach and Corona Rakshak short-term COVID health plans with a policy term of 3.5 months, 6.5 months, and 9.5 months, everyone should get them to beat the pandemic with the right healthcare.

    These plans were earlier not renewable when they were launched in 2020. But now renewal date has been extended till September 2021 citing the need and demand of the short-term COVID health plans.

    Also, you have to pay lower premiums and that’s one of the reasons why people opt for short-term health insurance plans. Not only this, you are provided tax benefits on the policy premiums u/s 80D of the Income Tax Act, 1961.

    Who Should Buy a Long-term Health insurance policy?

    Long-term health insurance policies are for everyone. There are several benefits of buying long-term health insurance plan. Firstly, you can opt for longer policy tenure from 1-year to 3- years.

    You don’t have to worry about renewing your policy frequently. Though, if you have purchased a short-term plan, you need to renew the plan regularly, else you will miss out on the 'No-claim-bonus’ that is accrued for not filing a claim during the policy term.

    The only factor is that the premium rates of long-term health plans are on a higher side in comparison to short-term health insurance plans that are more affordable.

    The cost is higher because the benefits offered are also extensive and for a longer duration. Long-term individual health plans, critical illness insurance plans, women’s health insurance plans, maternity insurance, etc.

    And if we look at the coverage benefits offered, you can avail more coverage benefits in long-term medical insurance plans in comparison to the short-term plans.

    After understanding the pros and cons of both types of health plans, we got to know that they have their unique set of benefits to offer. Be it long-term or short-term health plans, we all have understood the importance of health insurance in India. If you are planning to buy a medical policy for yourself and your family you can write to us at care@policybazaar.com or call us at 1800-208-8787

    FAQs

    • Q1.  What is short-term health insurance what does it cover?

      Short-term health insurance plans can have a maximum validity of up to 12 months. And they need to be renewed frequently as soon as the policy term is over. Since the tenures are short, the number of renewals increases.

    • Q2. What is the difference between long-term and short-term health insurance plans?

      The difference between long-term and short-term plans is in their policy tenure. While short-term health plans cater to your insurance needs for a maximum of one year. And long-term health plans can keep you insured for more than 1-year i.e. 3-5 years. Another major difference is in their premium costs. The longer the policy term, the more will be the policy benefits and higher the premium cost.

    • Q3. Are short-term health plans worth it?

      Health insurance for a short duration is called a short-term health plan. The premiums are low and limited scope of coverage. But they do help in meeting short-term health emergencies. However, if you are the sole earner or are planning to start a family, a short-term plan might not be worth it.

    • Q4. What is long-term health insurance policy, what does it cover?

      A basic health plan offers coverage for 1-year, and a long-term health plan covers you for 2-3 years under a single premium. You don’t need to renew the policy every year. As you pay the premium altogether, it can be a huge amount. But lesser than what you pay every year if combine for 3-years. Looking at today’s healthcare scenario, a long-term health plan is what you would need.

    • Q5. What are the disadvantages of short-term health insurance plans?

      Some of the drawbacks of short-term health plans are they do not cover maternity cover, critical illness cover, which is the need of the hour with the increasing medical inflation in India.

    • Q6. Are there any short-term COVID-19 health insurance plans in India?

      Yes, you can buy short-term COVID-19 health insurance plans in India. Two specific coronavirus health insurance plans i.e. Corona kavach plan and Corona Rakshak health plan were launched in 2020. The policies continue to be available in 2021. There are three tenure options i.e. 3.5 months, 6.5 months, and 9.5 months.

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