
Healthcare inflation is rising in India. As per ACKO India health report 2024, healthcare inflation was reported at 14 per cent in 2023. The ripple effect is reflected in the rising mediclaim insurance premiums. Health insurers, in general, have hiked premiums across their product basket by at least 15-20 per cent in 2024.
So, is there a way the insured can shield from such premium hikes. For a temporary period, yes. At the time of renewals, policyholders can opt for 2-3 year renewals instead of paying premium for a year. This is subject to affordability of course, if it is within the means as it requires huge upfront payment.
The benefits are multi-fold:
- Helps to offset the cost of rising mediclaim premiums.
- The multi-year plans come with good discounts on premiums of around 8-10 per cent, even more.
- The policyholder need not bother for renewals during that period, avoiding the possibility of missing the renewal.
- The tax benefit under section 80D on the premium amount paid can be distributed proportionately for each year based on the renewal of the policy. Let us assume you have bought a multi-year health insurance plan with a tenure of 3 years. The lumpsum premium paid was Rs.48,000. Under section 80D, you can claim Rs.16,000 deduction in each of the three years.
It is important to note though that as the multi-year health policy term concludes, premiums are likely to increase based on factors such as age, inflation and insurer specific policy conditions.