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Top Reasons Why You Should Upgrade to a Multi-Year Health Insurance Coverage

Over the years, the demand for health insurance has increased significantly with the increase in health emergencies. As per reports, India will rank 6th for the largest insurance market in the coming decade. TPA in health insurance is considered the primary contributor to the insurance sector. Experts suggest that the Indian insurance market is currently worth ₹1,886.25 and will grow at a CAGR of 5.12%. 

After the COVID-19 pandemic, people started taking health issues more seriously. It has made people aware of the importance of health insurance plans and schemes. Irrespective of age or class, everyone was negatively affected by the pandemic.

Adverse situations have taught people that it is necessary to have a financial solution like health insurance via third-party administrators (TPA) ready for such emergent scenarios of financial distress due to medical conditions. 

What is Health Insurance Coverage?

Health insurance is a policy which provides the holder with an assurance of providing immediate financial assistance in case of any medical emergency. Under this policy, the insurance company promises to financially assist the holder if illness, accident or injury occurs. The health plan also consists of cashless treatment or reimbursement methods depending on the clauses mentioned in the policy. There are many benefits of health insurance coverage –

  • Higher coverage for critical medical conditions
  • Coverage for additional costs
  • Tax benefits
  • Safeguards personal savings from draining.
  • Premium offers for customers

You must plan carefully and choose the insurance company and policy plan to avoid the hassle. A thorough research and comparison among all the alternatives must be done. The features and conditions of a health insurance policy vary from company to company; therefore, it is advisable to opt for a plan that fits all the criteria.

Features like multi-year also add on as an advantage to the customer’s delightful experience saving the holder from the tiring task of policy renewal every year. In case; you are planning to buy new health insurance or renew the existing one, it could be advisable for you to switch to a multi-year health insurance. 

Here are some reasons why multi-year health insurance of important –

  • Cost-Efficient: The most important reason for switching to a multi-year health insurance policy is that it saves money on premiums. Insurance companies generally provide discounts and schemes of 10% and 15% off on insurance premiums to customers with multi-year insurance policies of two and three years. These discounts result in saving reasonable amounts of money payable as premiums.  

For example, a man brought health insurance of ₹10 Lakh for a year. The plan premium is ₹8163 per year which will amount to approximately ₹25,000 in three years. On the other hand, if you choose a multi-year health insurance of the same amount for three years, the total payable premium for three years will be ₹22,652. The example clearly shows that this feature is a  significant benefit in the long term. 

  • Fixed Premium: There are various features like age, gender, health history, etc. which affect the value of payable insurance premium. Any change in these factors also shows a significant value difference in the premium amount. It further leads to a financial burden on the policyholder. When a person opts for multi-year health insurance, the company fixes the premium amount to ensure consistency for the entire insurance tenure. 
  • Auto-Renewal: An integral part of getting health insurance is renewing it timely. Once the policy expires, it stands as cancelled until renewed again. Insurance companies do not sanction any claims made by policyholders during the grace period, irrespective of the medical emergency that occurred during this period. 

In such a situation, the policyholder will have to burn up their savings to bear the medical expenses, disturbing the entire financial planning of the individual. The inflation in the medical sector is currently at 14% making bills and treatments an expensive affair. With the auto-renewal facility of a multi-year insurance policy, you can eliminate financial stress during such emergencies. Multi-year health insurance plans come with a lifetime renewability option as well.

  • EMI Advantages: Another benefit of multi-year insurance is the EMI facility. According to the IRDAI, the policyholder also has the flexibility to pay the premium in simple EMI instalments. The policyholders can also choose the frequency of payments making multi-year health insurance more cost-effective, reasonable, and accessible.
  • Tax Benefits: The government offers various tax benefits to the policyholder. As per section 80D, along with the usual insurance plans, multi-year insurance plans also come with tax deductions. The holder can claim the tax benefits annually or lump sum as per their choice, which results in maximum tax deduction. One can gain an additional tax benefit by making the entire premium payment in the initial year of the insurance plan. For example, if a policyholder pays the total premium amount of ₹60,000 in the first year, the holder can claim up to ₹20,000 each year.

**Note– The policies offered by insurance companies are different. The features, terms and conditions are subject to the norms and policies of the company. To ensure maximum benefit, always compare all the potential alternatives and then choose.


To sum up, the COVID-19 pandemic has taught people the importance of financial security from medical expenses. People now prefer to be more secure and therefore opt for health insurance. The basic requirements during emergencies are manageable under regular health insurance, but multi-year health insurance secures the policyholder for an extended period and reduces chaos and hassle.

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