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Why opting for short term health insurance plans is a wise idea?

dateKnowledge Centre Team dateFebruary 22, 2021 views168 Views
Why opting for short term health insurance plans is a wise idea?

Short term health insurance plan is a policy that provides temporary medical coverage in certain situations. This type of health insurance plan provides medical coverage when you are between health plans, outside enrollment periods, and need some coverage in case of an emergency. Short-term insurance plans may not be an ideal choice for the long term, but they can be a wise choice if chosen carefully and after doing proper analysis.

Benefits of short term health insurance plan

Temporary term insurance plans can be a smart solution for those in relatively good health and who want to escape from big, unexpected medical bills related to hospitalization or surgery. Here are some reasons why one should buy a short term health insurance plan:

  • Highly customizable

    Short-term health insurance plans fall under one of the best term insurance plans, as they are highly customizable and provide many options to choose from as per the situation and need. The policy length of the plan is very flexible; one can choose any length from three months or a year. One can also cancel coverage whenever required without any extra penalties.

  • Economical premiums

    The premiums are affordable. Generally, a short term health insurance plan can cost up to 30% to 50% less than traditional health coverage or other savings plan.

  • Easy availability

    Short term health insurance plans are available to individuals to enroll at any time. These can offer a low-cost option to continue coverage during certain periods when long term coverage isn't available. However, this kind of policy covers only major illnesses and accidents.

  • High liquidity

    Short term health insurance plan provides high liquidity in investment and can be redeemed in quick time without extra penalties.

  • Transparency

    The process of health term insurance plans is very much transparent. An individual can choose among different plans available.

  • Fills temporary gaps in coverage

    Short term plans are mostly designed to fill temporary gaps in coverage. This temporary coverage may be required if the policyholder has missed open enrollment for a traditional health plan, has lost or left the job, or just needs temporary support in health coverage.

  • No enrollment periods

    With short term coverage, one doesn't have to wait for open enrollment or qualify for a special enrollment period. The process of enrolling is quite simple and quick. One can also apply online and find out if they qualify within minutes. And if qualified, one can begin coverage as early as the next day.

  • Coverage for the unexpected

    The coverage of a short term health insurance plan is applicable when the insurance carrier is between a serious accident or unexpected critical illness and is looking to pay medical expenses for such a case fully out of pocket.

Who should invest in a short-term health plan?

Considering all the benefits of this plan, it is no wonder that healthy people might get benefited from a short-term health policy. These are individuals who don't plan on using healthcare services often. Since the premium of the policy is low as long as they don't need health services, healthy policyholders benefit from this further. However, this plan may not be a good idea if the insurance carrier is looking to start a family.

Individuals with any illness like pre-existing conditions such as asthma or diabetes should avoid short-term plans mainly because these pre-existing conditions will likely lead to significant premiums even if coverage is provided. These pre-existing conditions that are chronic health conditions majorly include the following:

  • Arthritis
  • Asthma
  • Cancer
  • Chronic obstructive pulmonary disease
  • Congestive heart failure
  • Diabetes
  • High cholesterol, and
  • High blood pressure

In short, the short term insurance is for the following:

  • Those who are unable to apply for the long term plan because they missed open enrollment or do not qualify for special enrollment.
  • People who are waiting for other long term coverage to start.
  • People who are looking for coverage to bridge to medicare.
  • People who are coming off the parent's insurance.
  • People who are stumbling between jobs or are waiting for benefits to begin at the new job.
  • Who is healthy and looking for a temporary alternative to pay for the unexpected medical bills.
  • People who are uninsured consumers and ready to address as many medical issues as possible during the length of the plan.

What does short term health insurance cover?

Short term health insurance plan is a temporary option that provides many benefits to those who need it. This plan provides the following cover:

Emergency care

As discussed earlier, this plan will give its insurance carrier emergency care and peace of mind from unexpected medical costs. This is one of the best term insurance plans that will cover hospital visits if the insurance carrier is seriously ill or injured. These plans also cover the follow-up care for acute medical issues until the coverage ends.

Primary care doctor

Short term health plans are accepted by almost all doctors, and the insurance carrier will receive many benefits after enrollment. Although the carrier has to pay for care on their own before hitting the deductibility, the cost for a visit after hitting deductibility generally gets lower.

Specialist availability

Short-term plans also cover specialized doctors such as dermatologists, orthopedists, or neurologists. Medical imaging such as x-rays is one of the common short term benefits.

What does short term health insurance not cover?

Short-term health insurance plans do not cover the ongoing health problems. They are designed to take care of immediate health needs and are not suitable for long-term maintenance of health issues. These very rarely or don't cover medical devices, dental care, or vision care. Prescription costs are also not covered under this plan and are mainly the insurance carrier's responsibility outside of a hospital setting. Short-term plans don't need to include every federal essential health benefit due to its short coverage period and low premiums.

Common myths about the short term health plan

Short-term insurance can grant essential health coverage to those who need it, yet so many people hold themselves back due to various myths that are propagated mainly due to misinformation or half information. The main reason being its coverage period and low premium rate; many people wrongly interpret that a shorter period of coverage may not be beneficial, but this is not the case. Here are some myths that are debunked regarding the short-term health insurance plan:

  • You must be young to qualify

    Short-term health insurance plans are not only for young and healthy, but it's for everyone. People aged between 19-64 years of age are most likely to buy a short-term health insurance plan.

  • The plan will last only a few months

    The term "short" does not imply that the plan will only last a month, but it goes as far as the coverage goes. The insurer can find themselves covered for up to 12 months. Besides, the insurer can renew their coverage to stay secure for up to 3 years.

  • Short term health plan coverage is only for dire emergencies

    Although the plan is mostly used in case of dire emergencies, this plan functions like standard coverage for everyday use too.

  • Doctors will not accept the coverage

    Most people hold themselves back from purchasing a short-term health plan because they think that they will not be covered at a standard doctor's appointment, but almost all doctors accept all different types of health insurance. Though, the physician or the doctor must be in-network for benefits to kick in.

  • Short term coverage is expensive

    This is wrong, and many people wrongly believe that short term plans are more expensive than their marketplace counterparts. In reality, short term plans are much more economical than a marketplace plan. This plan is almost less than half the cost of other marketplace coverage or long term plans.

  • Short term insurance plans are not worthy

    Short-term plans offer some limited benefits than long term insurance plans, but it does not mean that they are completely unworthy and are junk. These plants can be of great benefit for certain kinds of people, such as those experiencing a gap in coverage due to job loss, divorce, or are waiting for Medicare benefits to start. While all medical services are not covered but short-term plans can help with medical expenses relating to illness, injury, emergency room, and more solely depending on the parameter of the plan.

Health insurance policy is becoming very crucial in this era of disease-prone population and expensive medical treatments. If one is looking for temporary options, he/she can settle for a short term health insurance plan. Although, there are many best term life insurance plans available whose premiums and other expenses are relatively higher than the short term plans. The short-term investment is indeed an asset for the people who are looking for temporary medical coverage.

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Frequently Asked Questions (FAQs) for Health Insurance

Buying health insurance online is cheaper and more convenient than getting a policy through an agent. Insurance companies work on the premise that people who have access to the internet and are willing to buy policies online are more likely to be better-off and healthy. Moreover, online plans save a lot of money for the companies as the administrative costs such as documentation and office space get eliminated. The insurance companies pass on the savings to the customer and offer lower premiums on online health insurance plans. With online plans, you do not have to visit the bank of the insurer’s branch and can buy the policy sitting in the comfort of your home.

Canara HSBC Oriental Bank of Commerce Life Insurance provides a comprehensive health insurance plan named Health First. It is a fixed benefit plan that provides a lump-sum amount on the occurrence of heart or cancer-related conditions, besides 26 other major critical illnesses. It is a flexible plan that gives you the freedom to choose the cover you need along with various options to customize the plan according to your requirements.

Diseases can strike without any warnings. Having a health plan protects you from unforeseen financial hardships and helps you lead a stress-free life. A health plan also ensures that you receive quality treatment in case you are diagnosed with a serious illness. A health plan creates a buffer around your savings, which remains unscathed even in cases of substantial treatment costs.

There are no uniform rules to select an insurance policy as the needs and medical history of people vary. However, Health First plan from Canara HSBC Oriental Bank of Commerce Life Insurance offers comprehensive coverage, which could be adequate to take care of all your health insurance needs.

The health insurance premium depends on a variety of factors such as age, geographical location, lifestyle habits and occupation. The best way to calculate health insurance premiums is to use a good online premium calculator which is easily available.

With the change in lifestyles, the incidence of diseases has increased drastically. Health insurance is necessary to cover against lifestyle diseases, which are on the rise due to poor nutrition, lack of physical activity and pollution.

A health insurance policy ensures that you and your loved ones do not have to think about the finances while opting for treatment. In the event of hospitalisation, a knowledge of the claim process saves the policyholder from undue hassles. A hospitalisation can generate reams of bills and documents. The claim process of fixed-benefit health insurance is very simple as the payout does not depend on the cost of treatment. In case a critical illness is diagnosed you just have to intimate the insurance company. The insured just has to fill a claims form and attach the doctor’s report on the illness. One doesn’t need detailed bills and prescriptions to claim the sum assured. The entire process is very simple and hassle-free.

Health insurance premiums can help you in reducing tax outgo, as it is eligible for tax deduction under Section 80D of the Indian Income Tax Act, 1961. If you choose a health insurance plan for parents aged 60 years and above, you can claim Rs. 50,000 as a tax deduction. Senior citizens up to 60 years can also claim up to Rs 25,000 as a deduction for the health insurance premiums paid for themselves, or for their spouse or children. This deduction will be available with respect to payments towards annual premium on a health insurance policy, or preventive health check-up of a senior citizen. It is also available for any other medical expenses related to senior citizens. In such a case, if you are paying the health insurance premiums for your senior citizen parents, the total deduction you can avail is Rs. 75,000 per year.

There are no fixed guidelines for choosing adequate health insurance cover, but the cover should depend on factors such as income, family history of diseases and geographical location. Considering the high cost of medical care in metro cities, one should have a minimum cover of Rs 10 lakhs. The cost of hospitalisation and associated costs are higher in large cities. Smaller cities have lower cost of living and a cover of Rs 4-5 lakhs would suffice.

Health insurance plans do not cover all the diseases and certain conditions are excluded from the cover. Some of the common exclusions are:

  • 1.Pre-existing medical conditions
  • 2.Alternative therapies
  • 3.Cosmetic treatments
  • 4.Pregnancy and child birth
  • 5.Diagnostic expenses
  • 6.Dental
  • 7.Injuries caused due to a suicide attempt
  • 8.Waiting period clause
  • 9.Permanent exclusions: Injuries due to war, HIV, intentional injuries, congenital diseases, and others are permanent exclusions

Diseases can strike without any warnings. Having a health plan protects you from unforeseen financial hardships and helps you lead a stress-free life. A health plan also ensures that you receive quality treatment in case you are diagnosed with a serious illness. A health plan creates a buffer around your savings, which remains unscathed even in cases of substantial treatment costs.

Employer waiting period: Waiting period is the length of time that an employer will make a new hire wait before the employee is eligible for coverage access under the company's health

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