Given the significant health risks and rising medical expenses, having health insurance has become a necessity. Health insurance plans cover unexpected medical emergencies that can otherwise disrupt your financial budget.
Along with this, opting for medical insurance also provides you with the opportunity to gain health insurance tax benefits.
With a range of options available like short-term and long-term health insurance policies, it is possible that you get confused and purchase a plan that does not align with your needs.
To help you avoid such situations, here is a detailed article about these two categories of health insurance.
What Is a Short-Term Health Insurance Policy?
A short-term health policy is a health insurance plan with a tenure of up to 1 year and is more pocket-friendly. Suitable for those who want to pay lower premiums and switch health insurance plans as per the needs, a short-term health insurance plan provides financial coverage for a short period of time.
What Is a Long-Term Health Insurance Policy?
These health insurance plans have longer duration and saves the policyholder from frequent renewals.
The special feature of a long-term health insurance policy is that it also covers pre-existing diseases. However, there is a waiting period that needs to be completed to get this policy benefit.
A Comparison between Short-Term and Long-Term Health Insurance Policy
While the main difference between these two health insurance plans is the policy duration, there are still many other points that distinguish these two policies from one another. Let’s discuss them in detail.
| Feature | Short-Term Health Insurance Policy | Long-Term Health Insurance Policy |
| Policy Duration | Short-term health insurance covers the policyholder for a few months.
Generally, the policy remains valid for up to 12 months, and due to this, it is subject to frequent renewal.
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A long-term health insurance policy ranges between 2-3 years
It keeps the policyholder insured for a more extended period and hence, it may not require annual renewals.
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| Premium | The premium charged for a short-term health insurance policy is lower because its coverage is much more limited than long-term insurance.
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The premium for this type of health insurance remains higher than that for the short term. |
| Pre-Existing Illness Coverage | Short-term insurance may or may not provide the facility of covering a pre-existing disease (however, it depends upon the insurance company) | In the case of a long-term health insurance policy, most of the time, coverage for pre-existing diseases is provided.
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| Facility of Add-Ons | In general, a short-term health insurance policy may not offer add-ons. | Long term health insurance policies offer several add-ons that allow the policyholder to extend the coverage of his plan. |
| Sum Insured | It has a lower sum insured.
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These policies offer a higher sum insured of at least ₹10-20 lakhs.
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| Suitability | A short-term health insurance policy is considered ideal for those who want to be insured temporarily, like an NRI, a person who is going to travel for a few months, or someone who has just resigned from his job (where he was adequately covered). | Long-term health insurance best suits individuals who are in search of comprehensive protection for an extended period.
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What’s the Best Choice: Short-Term vs. Long-Term Health Insurance Policy?
The choice of health insurance depends on the needs. If you do not want extensive coverage and are looking for short-term protection from financial risks linked to medical emergencies, you should opt for a short-term health insurance plan.
The best part of purchasing a short-term online medical policy is that it saves you from time-consuming medical checkups and allows you to get insured quickly.
On the other hand, if you need financial backup for potential health issues for a longer period, you should buy long-term health insurance online. With this type of health insurance, you will no longer have to worry about policy renewal which often results in a hike in premiums.
Summary
There are a number of elements that you should consider before deciding on which health insurance to choose including your needs, policy coverage, premium amount, etc..
On one hand, a short-term health insurance policy lasts a few months but is suitable for those who travel a lot. On the other hand, long-term health insurance is the best alternative if you want health insurance for a longer period.