Of late insurers are offering enhanced benefits to policyholders – be it higher sum assured, health advisory or some tele-medicine facility at the time of renewal. Policyholders in such cases find it difficult to decide if they should be going for such enhanced benefits.
“Insurers offer additional benefits to their existing clients to incentivise them to renew the health insurance covers. Most of these covers come at no additional costs. It makes sense to go for such covers as they encourage healthier living,” says Sanjay Datta, Chief, Underwriting and Claims, ICICI Lombard General Insurance Company.
After enhanced tax benefits and increased awareness, health insurance policies have found many takers. As it is a yearly renewable policy, both insurers and customers meet again every year in the form of the renewal exercise. The renewal process is such that the insurer sends out a renewal notice to the policyholder approximately a month before the due date. The renewal notice typically enlists the current status of the policy - the sum assured, the claims filed during the year, the sum assured for the next year (including no claim bonus if applicable), the premium payable.
“In order to make products attractive and competitive and to ensure customer loyalty, the companies offer bouquet of benefits to their customers during renewal,” says Mukesh Kumar, Executive Director, HDFC Ergo General Insurance Company.
The add-on benefits offered may include additional sum assured, health advisory service, air ambulance benefit, discount on a gym product, telemedicine or even an app that measures your daily walk and fetches you a discount on your health insurance premium if you are a consistent performer on the parameters the app defines.
The ideas such as fitness app sound good, especially if you are a tech-savvy guy. But when it comes to cutting the cheque, one thinks twice if it is really going to add value to his insurance cover.
“Relevance of the benefits offered and the usability should be the first criterion for choosing an add-on. And check if it charges you extra,” advises Mukesh Kumar.
Let us understand it with some examples. Maternity cover is an add-on benefit that generally comes at an additional premium. For a male insured individual, holding an individual health insurance policy, it is of no use. However, for a couple planning to go for a kid in the next couple of years, it makes sense to go for maternity cover. Of course, do note that the maternity cover also comes with a waiting period clause.
Sometimes at an additional premium, the waiting period for covering existing diseases is reduced. Such a variant is useless for someone who has no adverse medical history. If you could try to look at a benefit from your needs point of view, you can pick and choose the benefits right.
“It becomes a tricky issue when the insurer is offering you additional sum assured. The additional sum assured can be obtained by going for a top-up health insurance plan and it could be cost-effective, too,” points out Deepak Yohannan, Founder of MyInsuranceClub.
For example, for a 35-year-old male a health insurance policy offering a sum assured of Rs 3 lakh comes at a premium of Rs 5,095. If he opts to enhance his cover to Rs 8 lakh on the basic health insurance policy the premium works out to Rs 15,125. But if he wants to buy a top-up of Rs 5 lakh with a deductible of Rs 3 lakh, he has to pay a premium in the range of Rs 2600 to Rs 3600. Depending on your age, sum assured and the additional sum assured may vary. You will be better off checking the prices online for both options.
Some insurance companies also offer discounts on various gym memberships and other health services. “If the benefit is being offered through third-party vendors, it is important to check the genuineness of the brand and the vendor through whom the benefits are being given,” says Mukesh Kumar. When you avail of a gym membership using your health insurance card, the insurer does not offer any service guarantee. So, the principle of buyer beware prevails.
At the time of renewal of health insurance policies if your age slab is changing, your premium is bound to go up. Changes in sum assured and changes in additional benefits entail higher premium. No claim bonus and free benefits, however, are not charged. It makes sense to call up your insurer or the advisor to clarify your doubts. Never ever make any assumptions. Also if you are not happy with the services of your existing insurer, you have the option to walk out. You can port your health insurance policy to another health insurance company. In that case, do not forget to check the claim settlement ratios and consumer complaints numbers among other things. Do not get swayed just because some other insurer is quoting a low premium. Such low premium may come at the cost of benefits.Health insurance policy renewal is a serious decision and one must keep renewing his covers. It costs too much if you do not renew it on time. Renew it to enjoy peace of mind.