Importance of Lifetime Renewability in Health Insurance

The features and structure of the health insurance policies have enhanced and have become more comprehensive over the recent years. To cater to the various requirements of the customers, several new features are added to the individual or family health insurance plan. Nowadays, many people have started living a healthy lifestyle, backing it up with a wellness program. However, this does not remove the risk of being hospitalized due to any medical emergency. With the skyrocketing cost of medical treatment, the need for the right health insurance has become more important.

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    One of the features offered by the health insurance policy is the lifetime renewability to avoid hassle and high premiums. Further in this article, we have discussed in detail the lifetime renewability features in a health insurance policy and how important it is.

    Rising Cost of Healthcare in India

    Based on the study by the National Sample Survey Office  (NSSO), the average hospitalization cost of private hospitalization was about Rs 31,845 (about Rs 27,347 in rural areas and Rs 38,822 in urban areas during the period of July 2017 – June 2018. Whereas, the average cost of hospitalization in public/government hospital was about Rs 4,452 (about Rs 4,290 in rural and Rs 4,837 in urban areas). Both cases indicate a high growth in hospitalization costs.

    Moreover, according to the data collated by the IRDAI on medical insurance claims, reveals a significant rise in the claim amount and severity of illnesses for which the claim is made. These numbers and statistics indicate the increasing importance of a comprehensive health insurance policy and also how important it is to renew health insurance policy online.

    What is Lifetime Renewability?

    As per the IRDAI, health insurance companies must offer a health insurance plan for an entry age up to 65 years. However, most of the private health insurance providers do not have such an age limit, however, the state-owned general insurance companies set the entry age up to 65 years. As per the IRDAI guideline, it is mandatory for all the health insurance companies to offers lifetime renewability. If the policyholder fails to renew the plan, then while making a claim, he/she will lose the existing benefits of the lapsed policy.

    After the issuance of the policy, the policyholder has the right to keep renewing the policy for the lifetime. This feature can also be availed even if the policyholder filed a claim in the previous year. On arbitrary grounds, the insurance company cannot deny the renewal of the policy or the insurer will have to give a solid reason in writing if it denies the renewal of health insurance policy online.

    Why Lifetime Renewability is Important?

     The feature of lifetime renewability is very beneficial in the case of senior citizen mediclaim policy.  With the increase in age, the premium amount of the health insurance plan also increases as the apparent risk is also high and it gets difficult to get sufficient coverage. With the feature of lifetime renewability, the insured can ensure that the policy can be renewed lifelong without any age limit or any other restriction. For senior citizens, the benefit of lifetime renewability takes off the financial pressure in case of any medical emergency. Considering the burgeoning cost of health care, the importance of lifetime renewability has increased even more.

    Besides this, there are other new features added to the health insurance policy, which is worth considering.

    Sub-Limit

    Nowadays, sub-limit in a health insurance policy has become an important feature to take into consideration. The total cost of healthcare during hospitalization generally includes room-rent, doctor’s consultation fees, operation charges, surgery fees, medicine costs, etc. Sub-limit refers to restraining reimbursement under some or each of these co-heads to the pre-defined level. For instance, the room rent reimbursement can be set at 1% of the sum insured. So, irrespective of the total sum insured under the plan, the policyholder will have to pay a specific portion of the cost of treatment unless he/she sticks to the limit. Some of the health insurance policies do not offer sub-limits while other insurance providers offer the option of sub-limit to reduce the payable premium at the time of purchasing the policy.

    No Medical Check-up  Up to the Age of 45 years

    Before issuing the policy, the insurers evaluate the health of the policy applicant through the medical check-up and according to the disclosures made in the application form. For the policy buyers below the age of 45 years, most of the insurance company does not ask to undergo any medical test unless the insurance buyer has a critical medical history. However, it is very important for the insurance buyers to make all the important medical disclosure including the past or existing medical treatment if any.  To ease the process of claim settlement the policyholder can voluntarily undergo the medical test and submit the report to the insurer.

    Wrapping it up!

    New-age fetaures such as lifetime renewability in health insurance have make the product worth buying even more. However, while zeroing in on a health insurance plan, the insurance buyer should preferably start by comparing the plans from renowned insurers. Go through the details of inclusions and exclusions offered by the basic health insurance policy. Make sure that to consider all the other features offered by the policy and not make a decision based solely on the premium amount of the policy. By keeping the requirements of the health insurance coverage in mind make an informed decision.

     

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