Q. I am 35 years old working in an MNC having health insurance cover of Rs. 25 lakhs which I renew every year. Considering the soaring inflation, I want to know what are the ways that I can save up on premiums amid premium hikes. Apart from saving on premiums, what are the other benefits that are available?
Amid rising lifestyle diseases, unexpected health hazards, soaring health care costs and financial uncertainty, health insurance serves as a shield that an individual needs persistently. To overcome medical inflation and probable premium hikes, a multi-year health insurance policy is the best option.
A multi-year health insurance policy enables policyholders to pay the premium for the next two or three years at one go or in instalments. With this, you pay a fixed premium from the beginning of the policy tenure till the end. So even if there is a rise in premium, you don’t have to worry as you would pay the same premium amount during the entire policy term.
Not just this, with the help of multi-year health plans you can eliminate the hassle of renewing the policy every year, thus making it convenient and cost-effective. The other advantage of opting for a multi-year policy is getting a discount on the premium. For instance, if you purchase the policy for a 2-year duration, then you can receive up to a 10 percent discount offered by most health insurance companies.
Additionally, multi-year policies of 3-years help the insured in lowering their health insurance premium by up to 15 percent. So, if you are paying a premium amount of Rs. 25,000 per year for your health insurance plan, you can get a discount of up to 10 percent and can lower your premium to Rs. 22,500 per year by buying a 2-year insurance policy. And in case you purchase a 3-year insurance plan, the premium can further reduce to Rs. 21,250 per year.
Another factor impacting the premium is the policyholder’s age. The premium increases as you age for you may need higher coverage later in life. By opting for a multi-year health insurance plan, you don’t have to worry about any additional charges as you would be paying the premium upfront which will continue for the next 2-3 years. Annual health check-ups are also provided under multi –year health insurance where you are eligible for a free medical check-up every year.
Lastly, if you fall under the tax slab, you can avail tax-benefits under Section 80D of the Income Tax Act, 1961 while opting for a multi-year health insurance policy. You can choose to claim the tax benefit year by year. You can choose what works best for you – claiming tax benefits all at once or every year. You also have the flexibility to pay your premium in EMIs thereby making it even easier on the pocket.
I strongly recommend you to free yourself from the worry of renewing health insurance plans yearly and rather go for a multi-year health insurance policy to enjoy these benefits.
Sarbvir Singh is the CEO of Policybazaar.com