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Which One Should You BuyLong-term vs Short-term Health Insurance?

By Juhi Walia
11 October 2022, 12:43 PM

When purchasing health insurance policy, it’s up to you if you want to go for a short-term health policy for a year or a long-term health insurance plan for more than 1- year. The decision should be grounded on your medical demands and how long you want to avail yourself of the benefits.

Suppose you have a long-term health insurance plan like a critical illness plan or a family floater health insurance policy. In that case, it has its purpose to serve but to meet the coronavirus pandemic situation, insurers have also launched short-term COVID- 19 health plans in addition to other short-term plans.

So, before you buy health insurance online, it's helpful to understand the difference between the two. Here's a comparison between India's long-term and short-term health plans to help you buy a suitable health plan for yourself.

Long-Term vs Short-Term Health Insurance

A long-term medical insurance policy keeps you insured for 2- 3 years. And a short-term health insurance policy requires you to renew the policy constantly because it's valid only for a short duration.

Who Should Buy a Short-term Health Insurance plan?

Short-term health insurance plans are ideal to meet the insurance needs for a temporary phase, like in case of a job change, COVID- the 19 pandemic, etc. Short-term medical plans help fill the temporary medical coverage gap during the transition phase.

  • The duration of these plans can be for a year.
  • They're a perfect option while porting out your health insurance plan to fill the time and stay ensured during the portability period.
  • The advantage of insuring yourself with a short-term health policy is that you no longer need to worry about any unforeseen medical emergency.
  • Short-term health plans make sense for students who come here to study for a shorter duration and Non-resident Indians (NRIs).

You can also opt for Corona Kavach and Corona Rakshak's short-term COVID health plans with a policy term of 3.5 months, 6.5 months and 9.5 months to beat the financial pains caused due to the pandemic. These policies were earlier not renewable when they were launched in 2020. But now the renewal date has been extended till September 2022, demonstrating the need and demand for the short-term COVID health plans.

Also, you have to pay lower premiums, which is one reason people opt for short-term health insurance plans. Not only this, you're provided tax benefits on the policy premiums under Section 80D of the Income Tax Act, 1961.

What is Covered Under Short-Term Health Insurance Plans?

The coverage of a short-term health insurance plan depends upon the health insurance company. Below following things are covered:

1.  Ambulance Charges

The charges of hiring an ambulance to transport the patient from one place to another would be covered under the short-term health insurance plan.

2. Health Check-ups

Daily health check-ups are conducted on insured persons to monitor their current health status.

3. Hospitalisation

Expenses related to hospitalization like medicines, bed charges, doctor visits, operation theater charges, Room rent, cost of surgeries, etc.

4. Expenses Related to Organ Donation

Some insurance policies provide plans which may cover the cost of undergoing organ donation surgery.  

5. Getting Treated Before and After Hospitalisation 

It may be necessary for the planned surgery. In short-term policies, these charges are covered.

Who Should Buy a Long-term Health Insurance Plan?

Long-term health insurance plans are for everyone. There are several benefits of purchasing long-term health insurance plans. Initially, you can conclude a longer policy tenure of 2-3 years.

You do not have to constantly tense about your policy renewal. Though, if you have bought a short-term plan, you need to continue the plan regularly, or else you'll miss out on the no-claim perk accrued for not filing a health insurance claim during the plan term.

  • The only factor is that the premium amount rates of long-term health plans are higher than short-term health insurance plans that are much more affordable.
  • The cost is higher because the advantage offered is also expansive and for a longer duration—long-term individual health policy, maternity health insurance, women’s health insurance plans, critical illness health insurance, etc.
  • And if we look at the coverage advantages offered, you can avail yourself of more benefits in long-term medical insurance plans compared to short-term plans.

After understanding and calculating the pros and cons of both types of health plans, we learned they've their unique benefits. Whether long-term or short-term health plans, we all have understood the significance of health insurance in India.

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1. What is a short-term health insurance plan? What does it cover?

Short-term health insurance policies can have a maximum validity of up to 12 months. And they need to be renewed often as soon as the plan term is over. Since the tenures are for a short time, the number of renewals enhance.

2. What is the difference between short-term and long-term health insurance policies?

The difference between long-term and short-term policy is in their policy tenure. At the same time, a short-term health policy caters to your insurance needs for a maximum of one year. And long-term health policy can keep you insured for more than one year, i.e., 3-5 years. Another significant difference is in their premium costs. The longer the policy term, the more the policy benefits, and the higher the premium charges.

3. Is the short-term health policy worth it?

A health insurance plan for a short period is called a short-term health plan. The premiums are pretty low, with a particular scope of coverage, but they help meet short-term health emergencies. However, if you are an earner or planning to start a family, a short-term plan might not be worth it.

4. What is a long-term health insurance policy, and what does it cover?

A primary health plan offers coverage for 1-year, and a long-term health policy covers you for 2-3 years under a single premium amount. You don’t need to renew the plan every year. As you pay the premium amount, it can be a considerable amount. But less than what you pay every year if combined for three years. 

5. What are the disadvantages of short-term health insurance policies?

Some of the drawbacks of short-term health policies include frequent renewals, higher premiums overall, etc.

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