Mistakes To Avoid When Renewing A Health Insurance Policy

Consumers today view health insurance as not only a financial safety net but as an indispensable assurance in trying times. It acts as a vital backup of funds that protects our savings from draining out in times of need. After the rise of the Covid 19 pandemic and its consequent impact on people's lives, hospitalization expenses and medical bills have shot up greatly. This adversely affected the financial standings of those caught in the death grip of the novel coronavirus. However, the virus also burgeoned people's awareness regarding health insurance and its importance.

Now, if you have a single-year policy, its renewal will occur annually, whereas the renewal of a multi-year policy is issued after two or three years. However, getting a multi-year policy will get you a premium discount, varying between 7.5-15% from insurer to insurer. So if you’re looking to buy a health plan, buying a multi-year policy is a more beneficial option. While it is already a great habit to inculcate, there are also some valuable benefits of renewing your policy on time. Some of these benefits take the form of lucrative features like a secure No Claim Bonus or NCB, No Fresh Waiting period, etc. Often people tend to lose out on these useful benefits by committing mistakes while renewing their health insurance. So let us look at some common mistakes to avoid while renewing health insurance:

Reassessing Sum Insured

The top priority for any policyholder renewing their insurance policy has to be the assessment of their sum insured. Often people overlook its importance as a common mistake and end up with an inadequate cover in their times of need. Ever since the pandemic, medical costs have been on the incline with an average expenditure of anything between 10 and 15 lacs respectively. With these figures in mind, an average metro-dwelling individual needs to have a sum insured of at least Rs 10 lacs. With the rise in health inflation increasing from 3.8% in December 2019 to 8.4% and 7.7% in May and June 2021, the value of having adequate sum insurance has increased manifold. Upgrading your financial security has become the need of the hour, hence reconsidering the limit of your sum insured becomes crucial.

Maintaining Transparency

Let's suppose that you are a healthy policyholder and sometime after you buy health insurance, you are affected by some chronic disease. Such diseases include illnesses like diabetes, hypertension, etc. Now, in case the insured contracts such an illness before the policy renewal, they are obligated to notify their insurer about it while renewing their policy. Not maintaining transparency with the insurer can prove to be a big mistake. Although there is no waiting period, it is always better to keep the insurer notified as it weighs in at the time of raising a claim. What's more important is that in case the insured wants to change their plan in the future or switch to another insurer, the said illness is will not be covered from scratch, and won’t attract a fresh waiting period.

Missing Wellness Benefits

These days insurers are offering profitable discounts, ranging between 80-100%, on the renewal amount. Besides this, there is also a bunch of other rewards and benefits for policyholders renewing their plan. Since taking care of our health is the best insurance one can get, a lot of insurers have shifted their focus towards preventive health care in place of curative health care. But people often make the mistake of not paying attention to these details and miss out on these benefits. The insurance industry is also leveraging health gadgets to provide rewards and benefits to health-conscious policyholders. Simultaneously, many insurers are keeping track of the health activities of policyholders through wearables. Therefore, every time you renew your health plan, be sure to check for Wellness Benefits to avail of these advantages.

Checking For Consumables

During the recent pandemic, consumables claimed a crucial part of treatment expenses, including the exorbitant costs of PPE kits, etc. Before the pandemic, consumables took up 3%-5% of hospital bills. However, after the pandemic, these figures have escalated to a whopping 25%-30%. Therefore, not checking for consumables during the renewal of your policy is a big mistake. Policies that do not cover consumables, give you the option of buying attractive add-ons for coverage of consumables at the time of renewal.

Adequate Grace Period

All health insurance policies have a grace period. The grace period lasts for thirty days, within which the policyholder needs to renew their policy before it expires. However, a problem with renewing your health insurance during the grace period is that, if you go through a medical emergency and need hospitalization, medical expenses, etc., at that time, those expenses will not be covered by your insurer. This is a mistake that often happens as a result of the insured’s carelessness or upon forgetting the policy renewal date. Hence, it is best for policyholders to periodically renew their health insurance before its due date.

Family Inclusion

While renewing your policy, you get an option to add more of your family members to your policy. Often policyholders add their children or parents under their health insurance plan for additional protection. Moreover, adding family members to your health plan amounts to getting tax benefits. However, sometimes people forget to duly inform their advisors or agents about this inclusion. This is a mistake and must be avoided at all costs while renewing your health plan as it may have far-reaching effects. Be sure to inform your agent or advisor and talk it out with them regarding your decision, and they will help you take your request forward.

Failing to renew your health plan may lead to a lapse and result in you getting a new plan, but committing the said mistakes could keep you from using your policy to its full potential. It means that not only the continuity of your policy will be lost, you may also have to undergo the waiting period from square one. Therefore, be sure to avoid the above-mentioned mistakes at the time of policy renewal to be prepared for all unforeseen circumstances lurking in the future.