Long-term health insurance: Weighing the pros and cons

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05 Feb 2024

Let's focus and understand about the pros and cons of long-term health insurance.

Considering the consistent rise of medical costs, maintaining a befitting health insurance has become a necessity. Although group health insurance is a part of standard inclusions for most companies, most of the time it proves to be insufficient. Therefore, an individual health plan with sufficient coverage is essential to ensure quality healthcare during emergencies.

This article will focus on the pros and cons of both short-term and long-term health coverage.

What is meant by long-term health insurance?

Health insurance duration plays a significant role in ensuring its optimum coverage scope. Unlike the standard health plans with a tenure of 1-year, long-term health plans offer coverage for 2 or 3 years, depending on the terms of the concerned plan. This implies that you are free from renewing your health plan every year in the case of an extended health policy.

Advantages of long-term health insurance

Some of the most significant benefits of long-term health insurance are:

  1. Keeps you away from the hassle of yearly plan renewal

  2. Most companies allow special discounts for prolonged health insurance duration

  3. It may prove to be comparatively cheaper, especially for younger policyholders

  4. Allows enhanced tax savings.

Disadvantages of long-term health insurance

Some of the significant disadvantages of long-term health plans are:

  1. Most long-term health insurance providers do not tend to cover senior citizens

  2. The hefty lump sum premium payment might prove to be a bit burdensome

What is meant by short-term health insurance?

Short-term health plans are standard health covers spanning for no more than 12 months. You have to renew it after that unless you like to forfeit the NCB benefits. Most individuals opt for this sort of plan as it frees them from the burden of paying hefty premiums at one go like in long-term health plans.

Advantages of short-term health insurance

Some of the most promising advantages of short-term health insurance include:

  1. Allows comprehensive health coverage for one year as per the terms of the chosen plan

  2. Allows tax savings under Section 80D of the IT Act.

Disadvantages of short-term health insurance

Short-term standard health covers come with certain disadvantages:

  1. Although the upfront premium value may seem to be manageable, it eventually results in more financial drainage when compared with the long-term plans

  2. Most short-term health covers do not offer maternity coverage

  3. These health plans do not offer PEDs

  4. Non-renewal of standard health policies may result in automatic forfeiture of NCB benefits.

Conclusion

Considering all the plausible pros and cons of both short-term and long-term health coverage, we might conclude that short-term health plans are ideal for comparatively younger policyholders. However, if you are seeking health insurance coverage at an advanced age, it is best to opt for long-term coverage protection. It tends to be hassle-free and more convenient considering the circumstances.


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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.