Buying a health insurance policy has become very important in today’s time. You can renew the policy by paying premium every year or you can be free from this hassle for a few years by paying premium once.
New Delhi. In today’s run-of-the-mill life, people have to be extra careful about health. That is why gradually the trend of buying health insurance policy in India is gaining momentum. However, there is still a lot of potential in this field. Health insurance is usually renewed every year by paying premium. However, now the insurance customers have started getting the option of multi-year health insurance policy as well.
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As the name suggests, you pay the premium once and your insurance gets renewed automatically for the next 2 or 3 years. This allows you to avoid the hassle of paying premiums and renewing the policy every year. Of course, there are many advantages of a multi-year policy but there are also some drawbacks which people should keep in mind. By quoting an article from Mint, we will tell you its advantages and disadvantages.
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What are the benefits of multi-year health insurance?
In a policy with annual premium, every insurance company can increase the value of premium after one year but in this policy you have to pay only once in the entire tenure. So you get protected from the rate increasing every year. Naval Goel of PolicyX.com says that in recent times many insurance companies have hiked their premium prices, but those who have multi-year insurance will not be affected. At the same time, Pooja Yadav, Chief Product Officer, Edelweiss General, says that many times insurance companies also give a discount of 7 to 15 percent to customers taking multi-year policies. Apart from this, you can avail tax benefits every year till the end of the policy from the amount paid for the premium for 3 years. If you have taken a policy with a premium of Rs 60,000 then every year you can claim tax exemption of Rs 20,000 for 3 years.
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What is loss?
If you plan to port or cancel a multi-year policy after one year, it is likely that you will incur losses. Even if the insurance companies reduce the premium prices in the next few years, you will still be deprived of the benefit. Apart from this, how much better a multi-year policy is also depends on the service of the insurance company. Some policies start covering a disease after 2 years and some after 4 years. In such a situation, porting the policy can be quite a hassle.
