Can I get my health insurance premiums back after paying insurer for more than 10 years?

I am 30 years old and want to purchase a health insurance policy. I want to know if there any health insurance plans in the market in which I can get my money back after paying a premium for more than 10 years.

Name withheld  

Reply by Nitin Deo, Chief–Underwriting, Claims and Reinsurance, Zuno 

Let me commend you on asking a very relevant question which continues to perplex a lot of people. There are two types of products available for self-protection. Benefit products pay an agreed lumpsum when an insured event is triggered; indemnity products pay what you have spent at the hospital.

Life Insurance is an example of a benefit product whereupon an agreed sum is paid after the death of the policyholder. In some life insurance policies, you also get an option to get a return of premium benefit after the policy maturity. A health insurance policy is an example of an indemnity product that pays the policyholder what has been spent at the hospital subject to the terms and conditions of the policy.

As per Indian regulations, indemnity based health insurance policies can only be sold by general and standalone health insurance companies and policies where the policyholder gets some monetary returns are exclusively sold by life insurance companies.

For example, if you buy a life insurance plan with critical illness coverage, you may get a return of premium at the time of maturity. However, the benefit is limited to critical illnesses and comes with selected life insurance policies. It is recommended to thoroughly understand the policy terms before purchasing such a policy.

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A health insurance plan usually renews annually and includes a lifetime renewal guarantee as long as you pay the premiums on time. Suppose you consider the hospitalisation expense you will likely spend during your lifetime vis-à-vis the premium paid; your spend is most likely to be higher than the amount paid as premium. In that case, you will realise that a standalone health policy serves a different aspect of protection. Thus, health insurance is one of the most efficient ways of financing the healthcare costs incurred at the hospitals.

Simply put, no standard or regular health insurance policy offers a return of premium, but if you compare the value of premium paid, the amount received as a claim will almost always be higher. However, if you buy a critical illness plan that has a life insurance component, you may get an ROP maturity benefit along with the policy.

Both are important aspects of protection serving very different needs. 

(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)