What Should You Opt for? Short Term or long Term Health Insurance ?
Every individual living in this country should have a right to lead a healthy life. This can be realized through the access of quality health care service and an understanding of one’s personal health needs. We live in a time, wherein life style diseases are on a rise. Sedentary life-styles, and enormous stress related to work or life in general is putting us at the risk of developing life threatening diseases. In the face of all this, health insurance coverage is necessity, a non-negotiable want that protects you and your family members against any kind of medical emergency, accidents etc.
People in this country are slowly warming up to the concept of health insurance However, there is a greater need for people working in private sectors (particularly middle income groups) to adopt an affordable health coverage plan. Selecting a health care plan is a very tricky matter. Most people are not aware about the plans, and get caught up in technical jargons which can be quite confusing to them. One common question that looms the mind of an average insurance seeker, what kind of insurance health plan should they get? Should they opt for a short term plan or a long term health insurance plan?
The attempt of this write-up is to clear that air, and assist insurance seekers to make an informed choice and side with an insurance plan that will take care of individual health needs as well as that of their family.
What is a long term health insurance plan?
Unlike your regular one year health insurance plan, long term health insurance plan have tenure of two to three years. Therefore, while your regular medi-claim policy may be valid for 12 months, a long term health plan keeps you covered for 2 to 3 years. This means, if you opt for a long term medical plan, you will free from renewing your coverage every 12 months.
Advantages of a long term health Insurance plan
- Breaks you free from the hassle of renewing your health coverage every 12 months.
- Most insurance companies will offer a discounted premium, if you opt for long term health insurance plan.
- Since long term health insurance plan covers a period of 2 to 3 years, you are immune from any kind of rate revision during that period.
- A long –term health insurance policy may also cover pre-existing diseases
- The cost of premium may vary depending upon how old you are. Some insurance companies charge lesser rates to younger health insurance seekers.
- Long term health Insurance Plan can also help you save tax on your income.
Disadvantages of long term health Insurance Plan
- Most Insurance companies do not cover senior citizens under long term health Insurance Plan.
- Having to pay a lump sum amount as premium for a long term health insurance plan may be stressful for some insurance seekers.
What is a short –term health insurance plan?
Short-term health insurance policies have a validity period of up to 12 months. After which it has to be renewed or else you can forfeit the right to “no claim bonus” or NCB. Generally, most people take up a short term health plan so that they don’t have to pay heavy premium associated with a long term health plan.
Advantages of short term health plan
- One of the foremost advantages of short term health insurance plan is that you do not have to pay high premium rate.
- Till the time you are paying timely annual premium, the advantages of long term insurance plan is equivalent to a long term insurance plan.
- Short term health care plan can also help you save tax under the section 80D of the income tax.
Disadvantages of short term health plan
- Although the upfront premiums you pay for a short term medical plan may be less, in the long term it can be an expensive proposition. Insurance companies tend to offer good discount on premium to individuals who take up long term health plans.
- Most short term health plans often do not cover maternity claims.
- Short term health plans are not valid to pre-existing conditions or diseases.
- If you do not renew your short term health plan timely, you are likely to forfeit the non –claim bonus.
Since, we have already discussed the pros and cons of both types of health plans, here is an afterthought. Its good news that you and your family members never had to make any health claims. Having said that, health insurance is a protective cover and comes in handy during the rainy days of your life, which can be both unexpected and sudden. Therefore, selecting the right insurance plan is a matter of much insight.
If you are a young and healthy individual, opting for a short-term health plan makes sense. But as you advance in age, you develop an innate instinct to protect yourself and your family members. In such a case, long term health insurance plan seems more feasible. Moreover, the success of long term insurance plan for two wheelers a couple of years ago, has urged many insurance companies to encourage long term health plans which are convenient, hassle free and have proven to be financially viable in the long run.