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Health Insurance Renewal: Do it Before Losing the Benefits!

Health insurance is a contract between the insurer provider and the insured to provide financial assistance at the time of any medical emergency. To maintain the services of the insurance policy, an insured has to pay a premium amount every year. Based on the needs and requirement of an individual and the family, one can select the type of policy suitable to provide enough cover to have medical assistance whenever needed.

Why’s Health Insurance Premium Renewal Necessary?

A premium is an amount to be paid every year to the insurer to continue using the benefits of health insurance. If the insured doesn't pay the premium amount in the specified period, then he/she may lose out on the policy, and the existing policy will no longer be valid for any medical assistance. To continue getting the health cover, a policyholder should always be aware of the premium payment date and renewal date.

Hence, every health insurance in India has to be renewed on time. The insurance service provider usually sends the notification to the insured about the upcoming renewal through the specified mode of instruction. An insured can get a mail, call, text message, formal letter, and email from the insurer stating the renewal date of the policy and the grace period, if any. Sadly, many policyholders lose out on the benefits of their existing policy by not renewing on time, and they end up paying either higher premium or buying a new policy altogether. 

It is a hassle to renew a lapsed policy because of the higher premium amount involved. In case the insurer denies renewing the plan after the grace period, there is no other option than buying a new health insurance policy. New health insurance will not just involve going through the documentation all over again, health reports and other important parameters will also be judged by the insured. 

There are multiple disadvantages of not renewing the policy on time, and some of the important ones are listed below:

Losing out on the Policy

A health insurance policy saves an individual and the family from unpredictable health issues that involve the high cost of medical bills, pre and post medical check-ups, expensive lab tests, and pharmacy bills. Not renewing the policy will result in policy lapse, and the insured won't get any financial assistance at the time of medical emergency.

In a scenario, if the insured or the family members fall sick, they will have to shell out their savings for covering the cost of treatment. This can result in a heavy burden on the pocket as the hospital bills are skyrocketing these days. All the hassle could have been saved just by paying a nominal premium amount to renew the policy on time. It is imperative that a policyholder keeps a note of policy renewal dates and must not avoid the payment to save money.

Losing the No Claim Bonus

Not renewing the policy has a long list of financial aftermaths, one of which is losing the no claim bonus offered for not claiming the policy in the policy year. If the policyholder has bought the policy last year and has not made any claim against it, then he/she is entitled to get a bonus or discount on the premium amount at the time of renewal. This discount is available even when the renewal is done in the grace period. However, if the grace period is over and the policy is still not renewed, the policy stands cancelled, and there will be no discount available. On the other hand, buying a new policy will be the only way out, which will cost paying a higher premium amount. Even with the best health insurance policy, timely renewal is a must to save on expenses.

Increased Waiting Period

A waiting period is a time during which, the pre-existing conditions and ailments or the medical conditions against which the claim has been settled are not covered by the health insurance. If a policyholder has such a condition and has been waiting for the waiting period to get over, renewing the policy on time will only result in saving the person. Not renewing the policy will result in losing out of this benefit, as after the lapse of the policy, he/she will be forced to buy new health insurance, which will require serving the waiting period all over again to cover the existing conditions. As a lapsed policy renewal might get denied by the insurer, the policyholder will have to bear the medical expenses by himself.

Lapse of Health Insurance

Non-payment of premium amount in the grace period will lead to the lapse of the policy. A lapsed policy is useless to the policyholder as it doesn't serve any financial benefits. One should check with the insurer to reinstate the policy, but it might require a medical check-up and payment of a higher premium with a penalty fee. It is entirely up to the insurer to reinstate or deny the policy. If the plan is reinstated, the insured will get no claim bonus, and a waiting period will have to be served again. A lapsed policy is useless as a cancelled policy, hence, an insured should always be wary of the health insurance policy renewal.

Medical Checkups

A policy renewal can save the insured from the hassle of medical checkups, which the insurer might require to issue a new policy. Undergoing through all the medical tests and checkups is frustrating to the insured and will consume a lot of time. The time-lapse in this period might also cost money for any medical expenses.

Things to Check Before Renewing Health Insurance

A policyholder should always check some essential points before renewing the policy. 

Checking the Active Coverage of the Policy

The active coverage means the health insurance cover, which the insured will get in case of any medical emergency. It is decided at the time of purchasing the policy and varies as per the type of policy and the requirements. Some individuals may prefer taking 3 lacs to cover, and some take 5 Lacs. Generally, family health insurance plans have higher coverage, like 10 Lacs and 15 lacs. Knowing the active coverage helps a person to know if he/she might need more financial assistance at the time of emergency. Based on that, the insured can increase the cover. A health insurance cover depends on several factors like increasing health expenses, current health conditions, any pre-existing issues and ailments, family expansion (new member in the family). An insured might want to increase the cover while renewing the policy owing to the addition of a family member by marriage or birth of a child. 

Assessing Current Requirements

At the time of purchasing the policy, an insured might not have thought of the maternity benefits and expenses incurred in childbirth. Family expansion is essential to be included while assessing the current requirements as a lot of costs get increased with arrival of a new member of the family. During childbirth, there can be a lot of complications that can result in added expenses, and further treatment of the mother and child also puts a lot of burden on the pocket of the insured. Adding these requirements will result in getting a policy with higher coverage, and one can get an increased cover in the existing policy by paying a higher premium amount.

Comparing Policy Plans

At the time of renewal, an insured might want to switch between plans to get more cover or shift to a family plan as per the requirement. Before renewing the policy, always check the products with the same insurer that are providing more benefits and features. As you are spending on the policy renewal, a better plan with higher cover might fulfil all the requirements. Rather than taking consultation from an agent, checking policies online will give a better understanding of the existing products. 


Written By: Paisawiki - Updated: 22 February 2021

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