Short Term vs Long Term Health Insurance

Health insurance policies are often the first investment instrument that young professionals are recommended to make, owing to the numerous benefits of health insurance. In today’s world, medical costs are growing exponentially, aided by rising inflation and technological advances.

As a result, health insurance can often prove to be the saving grace in case of unexpected medical emergencies. While nobody debates the importance of buying health insurance, confusions are bound to arise on which one you should opt for from among short term vs long term health insurance. Both offer unique benefits of health insurance, but in terms of which one you should choose, it is best to align your choice with your own specific requirements.

The best health insurance plans will offer you coverage for several illnesses, with additional cover-ons available in case you want to include coverage for a specific illness. While buying health insurance, there are several factors you must definitely take into consideration before you take a final decision. Make sure to map your requirements against the benefits of health insurance policies to recognize the best fit for you.

There are several differences between the benefits offered by short term health insurance and long term health insurance. Read on below to learn the pros and cons of both and be more informed while taking a decision.

Short Term Insurance Plans

Short term insurance plans, while similar to general health insurance plans, usually offer coverage for a significantly shorter amount of time. For most short term medical insurance plans, the period of validity is less than 12 months. Read on to learn the benefits as well as disadvantages of short term health insurance plans.

Benefits of Short Term Health Insurance

1. Low Premiums

Since the validity of the policy is also lesser than other long term health insurance plans, the premiums are also usually lower. Since the insurer is only offering you coverage for a short period of time, the premiums are accordingly lesser.

2. Seamless Transfer of Insurance Policies

It is unfortunate but common that policyholders may not be satisfied with the service offered by the insurer. In such cases, policyholders might want to switch to a different insurer, but it is difficult to terminate long-term policies without being charged a fine for it, and it can often prove expensive. However, with a short term policy, you can easily switch as soon as your policy validity expires. It is recommended that policyholders first try out a short term medical insurance policy with an insurer before investing in a long term healthcare policy.

3. NCB Benefits

No claim bonus (NCB) refers to the bonus offered by an insurer to a policyholder who has not raised claims during the validity period of the policy. By renewing the policy, you can avail the bonus and enjoy a discount on your renewed policy premiums.

Disadvantages of Short Term Health Insurance

1. Higher Frequency of Renewals

With a short term insurance policy, you are required to renew the policy far more often than you would need to with a long term insurance policy, which translates to higher frequency of processing.

2. Lesser Customization

With a long term policy, the policyholder has a lot more options in terms of customizations of the policy than a policyholder with a short term health insurance plan.

Long Term Health Insurance Plans

Long term health insurance plans offer wider coverage as compared to a short term plan, and for a longer duration. It could be valid for a couple of years and would offer several options in terms of renewals. These policies can be of several different types, including family health insurance plans, and can offer add-ons that offer additional coverage and are more comprehensive in nature.

Similar to short term health insurance plans, long term health insurance plans also offer certain benefits and disadvantages. Read on to learn more.

Benefits of Long Term Health Insurance

1. Longer Validity

A long term healthcare policy can go on for several years, thus, offering you extensive coverage over a longer period of time. This ensures that regardless of your health, you can be rest assured that your medical needs are taken care of if you get unwell.

2. Lesser Chances of Claim Rejection

With a short term policy, it’s easier to forget to renew your policy, owing to the higher frequency. It may so happen that you have forgotten to renew your policy but are then forced to raise claims for an unfortunate event. In such cases, your claim will be rejected owing to the policy being invalid. However, with a long term medical insurance plan, you are safeguarded against claim rejection owing to your policy still being valid.

3. Fewer Renewals

Keeping track of policy documents and remembering to renew it can be difficult. Thus, with a long term policy, you can rest assured that you don’t need to constantly be on edge and worried about losing your cover.

Disadvantages of Long Term Health Insurance

The most significant disadvantage of a health insurance policy is that it does not allow a policyholder ease in terms of switching policies, especially when compared to the comfort that the policyholder faces while switching their short term health insurance policy. With a long term policy, porting the policy is more difficult so even if there are better policies available in the market, it will not be possible for you to avail them since you already have an ongoing policy.

Short Term vs Long Term Health Insurance

Now that you know how short term and long term health insurance policies differ, it is important to assess them in terms of short term vs long term health insurance. Read on below for a comparison of the two, in terms of certain parameters.

1. Policy Period

A short term health insurance policy is valid for less than 12 months, while a long term health insurance plan is valid for a longer duration generally more than 12 months.

2. Cost

The premium cost for a short-term insurance plan is significantly lesser than a long term insurance plan.

3. Portability

It is significantly easier to renew a short term policy as compared to long term insurance plans, which makes it far easier to switch to better alternatives with a short term plan.

4. Coverage for Pre-Existing Conditions

Short term medical insurance policies do not offer coverage for pre-existing conditions, whereas long term insurance plans do.

5. Add-Ons

You can only buy add-ons with long term health insurance plans, while short term plans offer much less flexibility.

Conclusion:

As you can see, the benefits offered by short and long term health insurance plans differ, but have their own unique advantages. It is always best to pick a plan according to your specific requirements, since plans can often be customized to include specific coverage that you might want. The best health insurance policies today offer wide coverage, including hospitalization expenses.