To avoid crowding at the limited numbers of government-run hospitals and to get quick medical attention, many people have no option but to visit private hospitals. However, treatments in private hospitals are generally very costly and the rate of inflation in treatment costs are also very high.

So, in case of hospitalisation in a private hospital, the medical bill may run into several lakhs of rupees, exhausting even the lifetime savings of a patient and his/her family.

Therefore, to reduce the uncertainty of treatment costs, taking an adequate health insurance cover has become a necessity, where the premium to be paid is known, which makes the money outgo in case of hospitalisation quite predictable.

So, before you start investing, you should first take insurance covers – health insurance, life insurance and other necessary insurance covers – to reduce financial uncertainty, which in turn would ensure that the investment plans don’t get derailed in case of any eventuality.

Once a good health insurance plan – that suits your requirements – is selected, you have to decide whether to take the cover for 1 year or for a longer period.

While the insurance benefits remain the same for both short-term and long-term policies, by taking cover for a longer period, you may get saved from paying higher premium during renewal in case of upward revision of the premium in between the policy period.

“Customers have the choice to buy an annual or a multi-year cover for health insurance. Multi-year cover provides a host of benefits to consumers. The premium of a 3-year policy will not change even if the insurer decides to revise the premium during the period. As an example, if the premium is revised by 10 per cent at the end of year one, the customer will continue to get the benefit of lower premiums for the rest of the multi-year cover and in this case would save on 10 per cent for another two years. The policy once booked will continue to cost the same in subsequent years, making it immune to market volatility,” said Mayank Bathwal, CEO, Aditya Birla Health Insurance Co. Ltd.

By opting for long-period cover, a policyholder also gets some discounts on the premium amount.

“Additionally, policyholders are also eligible to receive a discount of 10 per cent for a 3-year policy & 7.5 per cent discount for a 2-year policy including the first year premium payable which will further increase their savings. A longer policy also ensures protection in a seamless manner for the entire family and the customer can avail tax benefit for the premium in an apportioned manner in respective years as applicable as well,” said Bathwal.