Decoding Insurance

Crucial Points to Remember When Renewing Health Insurance

Crucial Points to Remember When Renewing Health Insurance

It’s no secret that health insurance acts as your financial armour at the time of a medical emergency protecting you from draining your savings to pay hefty hospital bills. More so, people have realized its importance after facing the inflated bills for treatment of Covid-19. So, if your health insurance policy’s renewal date is nearing, you should immediately get it renewed without further delay. Usually, we send reminders in the form of emails or notifications in our app for renewal before the due date. 

Renewal of health insurance varies depending on the type of policy you bought. If you bought a single-year policy, then the renewal will happen annually. If you bought a multi-year policy, then renewal happens after 2-3 years. Renewal date is assigned to every health insurance policy. Timely renewal of health insurance helps to get all the benefits intact without losing out on any such as no claim bonus, no fresh waiting period, uninterrupted coverage. If you don’t renew your policy timely, it will lapse and you will have to buy a new one. Your waiting period will restart in your new policy and continuity benefits will also be lost. It is always advisable to renew your policy at least 10 days before the due date. 

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Interestingly, people have quickly realized the importance of health insurance in the past one year of the pandemic and therefore the number of people renewing health insurance is much higher than ever before. Of all the family-floater health insurance policies, sold last year on Policybazaar, over 85% of the policyholders renewed their policies before expiry. Similarly, approximately 80% of the customers with individual health insurance plans renewed their policies before the due date. For customers with health policies older than a year, the renewal rates were 94% for individuals and 97% for family floater plans. 

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When renewing your health insurance policy, there are a few key things to consider: 

Relook your sum assured needs

When renewing your health insurance policy, you should assess the sum assured, keeping in mind the rising medical costs especially amidst Covid-19. The treatment cost of Covid-19 at a hospital in a metro city is as high as Rs 15 lacs. Every insurer gives you the choice of increasing your sum insured at the time of renewal. An individual living in a metropolitan city should have a minimum sum insured of Rs 10 lacs. It will cost only Rs 600-800 per month. Of all the health insurance renewals this year, 35% of customers enhanced their coverage & invested in a high sum insured cover (Rs 1 crore health insurance) for adequate protection when renewing their policy through Policybazaar. Rs 1 crore health insurance is available these days at a premium of only Rs 700-900 per month, just a little over Rs 10 lacs cover. 

You can also buy a super top-up policy which acts as an additional cushion to your existing health cover when your hospitalization bill crosses your sum assured limit. A super top-up is also cheaper as compared to a comprehensive individual health insurance policy. You need to choose a deductible limit for your super top-up to activate.

Wellness benefits

Nowadays, you can also lower your premium amount by staying fit and healthy. Insurers have started to offer lucrative discounts 80-100% on the renewal amount apart from a host of other rewards and benefits. As they say, prevention is better than cure, it is important to take care of your health by eating nutritious food and exercise. This will automatically prevent you from a lot of diseases. This has become a lot more relevant in the current times when building your body’s immunity should be your priority to fight against this deadly virus. Likewise, the focus for a lot of insurers is preventive health care rather than curative health care.
 
Insurers are giving numerous rewards and exclusive benefits to policyholders who are conscious of their health. The concept of smart health gadgets is gradually picking up in India and the insurance industry is utilizing it well. Many insurers keep a track of health activities of policyholders through wearables. Insurers provide wellness points that can be redeemed as a discount at the time of policy renewal. Of all the people buying health insurance plans in the months of March and April last year through Policybazaar, over 20% of people renewed their policies this year through wellness points. This shows how the mindset of people has changed towards adopting an active and healthy lifestyle. Aditya Birla Health Insurance’s Activ Assur Diamond & Activ Health Platinum plans offer discounts upto 100% on renewal premiums. 

Similarly, Max Bupa Reassure Health Insurance Plan offers upto 30% discount on renewal premium basis the number of step counts taken by the policyholder.  HDFC Ergo My Health Suraksha Plan also provides a discount of upto 10% on renewal premium if the policyholder burns total of 900 calories up to a maximum of 300 calories in one exercise session per day or records a minimum of 50,000 steps in a week subject to a maximum of 15,000 steps per day tracked through wearable device linked with their app. In HDFC Optima Restore plan, you can get an 8% discount on your renewal premium by staying healthy. Cigna ProHealth plan offers a 20% discount on renewal premium by staying fit. 

Coverage for consumables

Consumables form a major part of Covid-19 treatment expenses. The cost of PPE kits is very high. Check if your health insurance policy covers consumables. You can buy add-ons at the time of renewal for coverage of consumables. For example, Max Bupa has a rider called Safeguard which costs only about 4-5% of premium. Care Health Insurance also provides a similar rider.

Discount on premium for a multi-year policy

Rather than going for a single-year policy, if you buy a two-year or a three-year policy, you will get a discount on your premium which varies between 7.5-15% across insurers.

Grace period

Every health insurance policy comes with a grace period. This means that upto 30 days from the date of expiry of policy, the policyholder can renew it at any point. However, the disadvantage of renewing your policy during the grace period is that God forbid if you face a health emergency and need to be hospitalized during this time, your medical expenses won’t be covered by your insurer. Therefore, always renew your health insurance before the due date.

Adding a member to your policy

You also have an option to add more family members to the policy at the time of renewal. You may want to add your parents or children under the health insurance umbrella and you also get tax benefits by adding them. You only need to inform your advisor about it and the rest will be taken care of by the insurer. 

Inform about your critical illness to the insurer

If you were completely healthy when you bought the policy but in the past one year before renewal, you get a chronic illness including diabetes or hypertension, then you should inform your insurer about it at the time of renewal. There won’t be any waiting period but it’s good to inform the insurance company because in case there is a claim, later on, they would investigate it. Secondly, in the future, if you want to port your policy to another insurer, then this illness will be covered from scratch itself and won’t attract a fresh waiting period.

Prefer renewing online

Health insurance can be renewed online. You should definitely opt for online renewal of health insurance because the process is quick, fairly simple, allows you to have multiple payment options and you don’t have to physically meet someone. The process is entirely digital.

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