Health Insurance 319 views September 15, 2021

Health insurance is vital to have amid the high costs of medical treatment these days. As per market reports, healthcare inflation has remained around 7-10% over the last four-five years. Inflation is expected to rise further with time. So, having a health insurance plan that covers you against a wide range of diseases and conditions will only prevent your savings from getting exhausted towards expensive treatment.

The availability of cashless treatment, when admitted to a network hospital of the insurance company, further adds to its appeal. Here, you don’t need to pay for the treatment. In case of admission to a non-network hospital, you can get the treatment expenses reimbursed after discharge. However, the coverage in both cashless and reimbursement claims is available up to the sum insured only.

Health Insurance

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All you need to do is pay the annual premium on time. And if you prolong your health insurance policy term, it will only benefit you more! Normally, health insurance plans are issued for a year. To continue the insurance cover, you can pay the renewal premium at the end of each year. At the same time, you can subscribe to multi-year health plans.

Either way, you are letting the cover continue and getting the much-needed financial protection against healthcare inflation. Similarly, there are several other benefits when continuing your health insurance plan for long. We’ll have a close look at these in this article. Let’s begin!

So, How Can You Maximize by Continuing Health Insurance?

Briefly, we have hinted at the utility of continued health insurance cover in protecting you against the rise in healthcare expenses. It is largely possible because of the high bonus you’re likely to earn when continuing the policy for a long period. We’ll explain in depth about the same as we move along. Besides, discounts on premiums in certain cases will only encourage you to continue your health insurance journey. Let’s discuss all these in greater detail below.

Scope for Increased Bonus

Health insurance plans come with a unique feature of No Claim Bonus (NCB) by which the coverage amount i.e. sum insured increases automatically without any increase in the premium amount. The sum insured is the amount up to which you will get coverage against diseases or conditions. This benefit comes when you don’t claim health insurance in a policy year. On renewal, the insurance company credits the same to your  policy. With more such bonuses, the eventual coverage amount can be substantially high to accommodate healthcare inflation. The bonus, which rises by 5-20% a year, can go up to 100% of the original sum insured amount. Let’s consider an example to understand it.

Example – You have a health insurance plan with a sum insured of INR 5 lakh. The company credits NCB of 10% on renewal for not claiming in a year. The maximum hike is limited to 100%. In case you don’t claim for three successive years, the sum insured would rise to INR 6,50,000 after three years. And the sum insured can rise to a maximum of INR 10 lakh on not claiming.

And if you choose a plan early on in your life, chances of accumulating such bonuses are high. The reason being your chance of falling sick remains low in your young days.

Discounts on Multi-year Health Insurance Policies

Health insurance plans when issued for two-three years can have discounts on your premium. These plans are called multi-year plans wherein one has to pay the premium for such time in advance. So, if the policy is issued for three years, you will need to pay the premium for that time in one short. The insurer will discount your premium payment accordingly. Let’s check the discounts applicable to some popular multi-year plans.

Health Insurance PlansDiscounts
Niva Bupa Super Saver Plan7.50% on the second year and 13% discount on the third-year premium
Aditya Birla Activ Assure Diamond Plan5% discount on a 2-year policy and 10% discount on a 3-year policy
HDFC ERGO Health Optima Senior7.50% discount on a 2-year policy
Tata AIG MediSenior7.50% discount on a 2-year policy
HDFC ERGO Day2Day Care7.50% discount on a 2-year policy

Note – Discounts are also available on adding family members to a plan. Health insurers like Aditya Birla also offer discounts to you on meeting the fitness parameters laid down by them.

More Tax Benefits

Tax benefits make your health insurance experience sweeter! Yes, tax exemptions are available on your health insurance premium up to INR 1.5 lakh in a financial year. And when the policy continues for long, it only increases your savings and gives you that extra space you need amidst unrelenting inflation.

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