April 13, 2021

Short Term vs Long Term Health Insurance: All Differences Uncovered

Health Insurance

Health insurance is the first thing that comes to your mind when it is about a medical exigency. With numerous benefits of buying health insurance which are not limited to coverage for hospitalisation, it is essential to make the right choice to protect for these uncalled medical emergencies. With the constantly changing and fast-paced lifestyle, health almost takes a backseat. While it essential to not ignore your health, it is when you address the questions like what is health insurance and why is it important?

When selecting a health cover, attention must also be given to the medical conditions faced by the policyholder as well as any serious ailments that need attention. This article elaborates on the short-term and long-term health insurance covers and the difference between the two.

Short term health insurance plans

Short term health covers are those with limited duration ranging from six months to two year at the most. These plans include medical expenses as well as other ancillary treatment costs like ambulance cover, pre and post hospitalisation expenses, etc. Since the policy coverage is for a limited and shot duration, the premiums for these short terms coves are affordable for many. When it comes to comparing a short term cover with long term, the following are the ways where a short term policy ranks better –

  • Since these policies are for a limited duration, you need not renew them each quarter. The insurance coverage automatically expires after the end of its duration.
  • These health insurance plans are best suited for student travelling abroad for studies as well as those travelling for work. Since the period of travel is limited, a short term health insurance policy makes it easy shortlist and select based on your travel duration.
  • Some insurance companies also extend the coverage of a short term policy to international location and not just within India. Thus, an medical treatment sought outside the country is also reimbursed under short term policy coverage.

Long term health insurance plans

Long term plans when compared to a short term policy are significantly different when it comes to duration of the coverage. These plans can be renewed consistently year over year up to a specified duration. While the advantages of shot term cover are mentioned above, let us look at the benefits of long term covers –

  • Long term policies have extensive coverage including not only hospitalisations, but also customisation for critical illnesses using additional coverage options.
  • The coverage under these plans differ among every insurer; however, some insurers also offer lifetime renewability of these policies. This way you need not worry about the policy expiring and you requiring to look for a suitable health insurance coverage.

To summarise the difference, let us look at the table below –

Long Term Health Insurance Short Term Health Insurance
These plans are required to be renewed periodically, generally every year. There is no need to renew these plans since they offer coverage for a limited duration.
There is a higher outflow towards insurance expenses since they need to be renewed year-on-year basis. Outflows are limited till the coverage is sought.
It aids to save taxes since it extends over one fiscal year. With a limited tenure, there are not much tax benefits for short term
Revision of insurance rates do not affect your premium Due to periodic evaluation of insurance rates by the insurance companies, the premiums differ.

To conclude, do not forget to compare health insurance policies and then make a selection based on your requirements. While both plans have their share of advantages, it is finally based on your requirement of insurance coverage.