How to Renew Health Insurance Policy

There is no better way of living than having a healthy life. While it is important to stay healthy, it is always good to have a backup plan in case of any health emergencies.  A valid health insurance policy helps an individual or a family to avoid undue financial stress which otherwise must come from his/her pocket. 

What is a valid health insurance policy?

Let’s take an example to understand better. 

Bandu has a health insurance policy which was valid until December 31. 

You as a policyholder should know that a health insurance policy will cover for medical expenses only up to a certain period. After which, you must renew to ensure that the policy continues its coverage. The renewal period is usually one year. 

So, Bandu’s health insurance was expiring on December 31 (after a year). By the end of February, Bandu had to undergo a small surgery and he decided to renew his health policy after the surgery. He didn’t renew it and unfortunately, his policy didn’t cover for any of his medical expenses. The entire expenses had to be borne by him. 

Now, to avoid a situation like Bandu’s it is better to pay the premium for your health policy before the due date. 

Also, Read – Importance of Health Insurance Policy

How to renew a health insurance policy?

Renewing a health insurance policy is fairly simple. Most of the time, the insurance company will reach out to the policyholder and help in the renewal process. 

You as a policyholder can also renew it online by following the steps:

• Visit the respective insurance website. Most insurers have a bot that helps you in the renewal process. For instance, in case of HDFC Ergo health insurance, the bot is named DIA (digital insurance assistance). 
• These bots offer various services including policy renewal, policy purchase, and other policy related services. 
• You either enter the mobile number (associated with the health policy) or enter the policy number (available in the policy document). 
• Some insurers, instead of a bot, have a renewal tab that directs policyholders to enter the policy number or phone number. 
• Once your policy is validated, the insurer’s page will show the current policy coverage, what’s not covered, riders opted and other details such as NCB, name, and who’s covered. 
• You as a policyholder can review these covers and go ahead with the payment, or if you want to modify, you can add/remove riders such as maternity covers or cancer cover. And then make the premium payment. 
• Alternatively, you can ask the insurer to contact you for assistance, who will then guide you in renewing your policy. Or you can renew the policy through the respective insurer’s agents. 

While renewing a health insurance policy is simple, it is better to know why you, as a policyholder, should renew so you don’t miss out on your premium due. 

Why renew a health insurance policy?

It is obvious, based on Bandu’s example, that policyholders should renew their health insurance policies on time to avoid any financial burden in case of medical emergencies. Remember, every health insurer offers a 30 days grace period after your policy is due. 

Now, over, and above covering for medical expenses, if you don’t renew a health policy even within the grace period, you as a policyholder will lose out on a few benefits. 

• Continuity benefit is lost. 

Every health insurance policy comes with a waiting period. This is the time when you (policyholder) must wait, say 30 days (initial waiting period), or two years (disease-specific) before the health policy starts coverage. 

Take Bandu’s case as an example. Suppose he had waited for about two years before the policy would cover him for diseases such as diabetes. As Bandu failed to renew his policy before the due date, he lost this advantage. That is, Bandu has to start all over again when he renews his health insurance policy. This means, he has to wait two years once again if he wants his policy to cover him for diabetes. 

• No No-Claim-Bonus benefit

Health insurers offer a certain percent of sum insured as a no-claim-bonus (NCB) benefit to those policyholders (after a year) for not making any claim during the policy period. That is, say your health policy amount is Rs 10 lakh. And you have not made a claim during the year. The next year, when you renew your health policy, the insurer offers to increase your Rs 10 lakh coverage to Rs 11 lakh without any increase in premium. 

Note that the NCB benefits vary with insurers. It is also known as cumulative bonus benefit. For instance, Star Health Insurance Policy (Star Comprehensive policy), offers cumulative bonus benefits to its policyholders. For policyholders above Rs 7.5 lakh policy cover, the bonus offered is 100% of base sum insured (policy cover) following a claim free year. This is up to a maximum of 100%. 

Now, upon the failure of timely premium payment, you as a policyholder will not be able to avail this benefit. 

• Others 

Any other benefits that the insurers offer may not be applicable if you fail to renew health policy on time. These include renewal premium discounts and other offers. You will also lose out on the tax benefits under section 80D.