The need for proper health insurance coverage is ever-increasing. Health insurance plans offer varying benefits. There are two specific types of health insurance plans: long-term and short-term. Let us see how these medical plans can make a difference in your life and how you can choose between the two. But first, we will explore the benefits of having a health insurance plan for you and your family.
Why Should You Have A Health Insurance Plan?
Health insurance plans are constantly improving to provide you with the best protection. Here are some advantages of having a health insurance plan.
- Coverage for your medical expenses: One of the major benefits of having health insurance is that it will help you cover your medical expenses. Many diseases are becoming common nowadays and are even becoming more common at a younger age. These conditions can hit anytime. Medical plans can be extremely helpful as they will take care of a large part of the expenses related to medicine and hospitals, especially in cases of emergency.
- Protect your family: Medical plans not only protect you but also other members of your family. Some health policies allow you to include your family in the same plan, thus ensuring that your family gets the best medical assistance.
- Protection against rising costs: the cost of hospitalisations, treatments, and medicines is ever-increasing. The doctor’s fees, consultation fees, and cost of diagnosis are also increasing rapidly. Medical plans can provide great relief from this financial burden.
- Portability benefit: Health insurance policies also have the feature of portability, which means that you can switch to another health insurance company while still retaining your benefits.
- Tax benefits: Health insurance policies also come with tax benefits. The premiums you pay for your health cover are often eligible for tax deductions.
Short Term v/s Long-Term Health Insurance Plans
- Short-term health insurance: These are medical plans that cover your expenses for a short duration, usually up to 12-36 months, after which you have to renew your policy to stay active. This cover will cover your medical expenses. You can also include your other family members in it.
- Tenure: Short-term health plans range from 1-3- years.
- No-claim bonus: These policies offer a no-claim bonus in the form of an increased sum insured for every claim-free year.
- Renewal: If the medical plan is not renewed, you can lose your no-claim bonus.
- Portability: You can also port your health insurance from one insurer to the other without losing its benefits.
- Tax benefits: You can claim a deduction for the premium payment.
- Cashless hospitalization: Short-term policies allow you to avail of cashless facilities at networked hospitals, thus being quite useful in emergencies.
- Pre-existing diseases: Short-term policies may have a waiting period before they start covering pre-existing diseases.
Long-Term Health Insurance
Long-term medical plans are health insurance policies you can buy for longer periods, like 10-20 years. These plans give the option to renew annually or pay a lump-sum premium for long-term coverage.
- Benefit payment: The benefit is payable in a lump sum, and it does not depend on the medical bills.
- Emergency usage: Long-term policies do not allow cashless hospitalization.
- Covered causes: Long-term health insurance covers specific diseases and not treatments. The benefits of these plans become payable upon diagnosis of a disease rather than on treatment.
- Level premiums: Long-term medical plans have a level premium if you choose to pay annually.
- Increasing or level cover: You can buy an increased sum assured or level sum assured policy.
- Riders: Long-term plans are also available for riders.
There are a few benefits of long-term insurance over short-term health plans, such as:
- It offers a lump-sum benefit
- You can get tax benefits and a cover for the early stages of the most dangerous ailments.
- You can have an increasing cover for inflation adjustment
- It offers adequate financial safety to your family from serious illnesses
Comparing Long and Short-Term Medical Plans
Short-term insurance covers your emergency medical bills. Whether you are hospitalized due to an accident or illness, this medical plan will take care of a large part of the bills. It is the emergency health plan you need from an early age. Hence, it is advised that you start with short-term health insurance as soon as you start earning. It can also cover your entire family under the same plan.
Meanwhile, long-term health insurance grows more important as you age and have dependents. It ensures that your family does not face financial hardships if you are down with a critical illness like heart failure, cancer, etc., so figure out which plan will provide you benefits to cover the treatment expenses.
The Bottom Line
Careful considerations of limitations, coverage options, and personal priorities are essential in selecting a medical plan that best meets your needs. Whether you opt for long-term or short-term health insurance, make sure that it aligns with your individual health care requirements as well as financial goals. This is the key to securing your protection in times of health-related uncertainties.
Disclaimer: MPB.Health memberships are a non-insurance solution designed to provide access to healthcare services. To determine if this aligns with your specific needs, we recommend consulting a certified expert advisor.
