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Choosing Between Short-Term & Long-Term Insurance Plans

Long-term and short-term health plans are two significant categories. It is crucial to comprehend how each of them functions and how they differ from one another. This will enable you to choose the kind of health insurance you need with greater knowledge.

  • Oct 20, 2021

There are a number of choices that one has to make while buying Health Insurance. One such choice to make is whether to invest in a short-term plan or in long-term insurance plans. Such a decision is important as it helps determine the allocation of your finances and expenses in a given period. Above all, it is of utmost importance to make an informed call regarding financial tools.

    Key takeaways

    Short-term insurance plans are the way to go if you are

  • In the middle of changing jobs
  • If you are a Non-Residential Indian (NRI)
  • If you are a student who is flying somewhere for short-term goals
  • Planning to shift to a new insurer or a new plan with the same insurer

Your choice should be made depending on the kind of requirements you and your family have and the time period for which you want to avail of these benefits. Having an idea about these things will help you settle on an ideal premium amount as well. As for the kind of term period that will be suitable for you, let us read on.

When are Short-Term Plans Ideal?

Short-term plans are the way to go if you are

1.In the middle of changing jobs

2.If you are a Non-Residential Indian (NRI)

3.If you are a student who is flying somewhere for short-term goals

4.Planning to shift to a new insurer or a new plan with the same insurer

Some essential features of this plan are as follows

1.These plans usually last from 3 months to 1 year - not more.

2.After every year or a few months, you will have to renew the plan

3.The premium for a short-term policy is usually low, thereby making it highly affordable

4.You can avail benefits under Section 80D of the Income Tax Act of 1961

5.They are the perfect option if you are planning on porting out your plan

6.You are covered for any kind of mishap that may befall you during the period

It is interesting to note that many people got short-term plans during the Covid-19 pandemic and continue to do so even now to keep themselves covered against the virus. Back in 2020, the Covid specific plans were not renewable, but now, they are. Short-term insurance policies are a great way to get yourself covered if you have specific short-term requirements.

When Are Long-Term Plans Ideal?

Some critical features of long-term insurance plans are as follows

1.They are an investment for your health and your future in the long-run

2.These plans are usually 2-45 years long or lifelong

3.The premium on such plans may be slightly higher than the short-term plans

4.The benefits offered and the add-ons are much more in long-term goals.

5.For example, long-term goals cover critical illnesses and pre-existing illnesses and also provides maternity cover.

Thus, with a longer duration, you need not be concerned about having to renew the policy regularly

Long-term health insurance policies differ from short-term health insurance policies. Here’s how.


Short term plan

Long term plan

Policy period

Less than 1 year

More than 1 year


Less expensive than long-term health insurance

Greater than temporary health insurance


Certain costs, including as hospitalisation for a certain condition, are covered.

provides a variety of other benefits in addition to covering hospitalisation for a wide range of diseases and treatments.

Pre-existing conditions

Usually not available


Add-on covers

Usually not available


Suitable for

People looking for temporary coverage, such as NRIs or international students, or coverage for particular conditions like COVID-19.

People seeking comprehensive protection or long-term security.

Apart from these, there are also smart term plans today, which are customised to fit your needs! You can pick and choose from various benefits and add the ones offered by your insurer. This will enable you to tailor a plan based on you and your loved ones’ needs and requirements. Frankly, buying insurance has become a lot easier today owing to the various facilities that banking and insurance companies offer to us.

Wrapping up

You can distinguish between short-term and long-term insurance now that you are more knowledgeable about these two types of insurance policies and their distinct perks and downsides. So that you and your family are financially covered against any medical emergency, it should help you make a better-informed decision when selecting the finest health insurance. Now, whether you need a short-term plan or a long-term one is up to you. The main takeaway here is that insurance is important for everybody. So, if you don’t have one yet, invest today!

Kotak e-Term

Download Brochure


  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**

Ref. No. KLI/22-23/E-BB/2435


- A Consumer Education Initiative series by Kotak Life

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