Many of us make the mistake of renewing health insurance every year without giving it a second thought. While being continuously covered by a health cover year after year is a good thing, what needs to be reviewed every year or two is whether the insurance is appropriate for your current circumstances or not. Let’s understand this aspect in detail.
Insufficient coverage amount
The first factor is that your life circumstances will change every year. So, your health policy too should be in sync with the changing requirements. How? Let’s say you bought a health insurance policy with Rs 3 lakh coverage when you started working at the age of 23. Now, at 32, you are married and have two kids. You have diligently been renewing your health insurance every year. But you still have a cover of Rs 3 lakh only. Of course, you have done one good thing that, over time, you included your spouse and children in the policy. But the cover still remains what it was years back: Rs 3 lakh.
So, is the Rs 3 lakh health insurance good enough for a four-member family? Probably not. Ideally, you should have increased your health cover much earlier to a bigger amount (of say) Rs 10-15 lakh. And it’s not just because of new members being added in the policy that the coverage should be increased. Given the steady rise in hospitalisation costs and India’s generally high medical inflation, it makes sense to increase the sum assured once every few years. Or, you can opt for a top-up cover once feasible.
Therefore, at the time of renewal, you must review the existing health policy and assess the insurance needs to see if it still provides sufficient coverage for your changing family and health requirements.
Many times, due to forgetfulness or out of lethargy, people fail to get new members added to the existing policies. This is something that needs to be taken care of during renewal too. Get new dependents (children, parents, etc.) added to your health insurance at the time of renewal. Don’t just renew without assessing the suitability of the policy with your new family structure.
Two questions that you can pose to yourself during this review are: “Is your sum insured sufficient for existing members?” and “Would you like to add any family members and increase the cover?”
Once the assessment of your health insurance coverage requirement is done, you need to keep in mind a few other factors.
Not the changes in policy terms
At times, policy terms and conditions may be changed. The insurer may increase the cover or/and premium amount depending on the frequency and types of claims made, applicability of no-claim bonus, etc. Or, there might be some changes in the list of network hospitals that might impact you (as you too might have changed your location over the years). If your preferred hospital isn’t on the new list, then it might be better to change the policy.
During renewal, you must declare any new illnesses that you or any member might have. Though people prefer to hide such things, it is always best to be honest and disclose this to the insurer. By doing this, you will eliminate the risk of some claims related to that illness/disease getting rejected if you make claim in future.
Availability of new and better options
Health insurance is a dynamic space and, every few months, new plans are launched. These offer good benefits and features. Many such new features may be useful for you, but may not be a part of your existing policy.
So, if you want, you can port your policy from one insurer to another to get a new policy with additional features you want to have (or if you are getting a higher cover at a lower premium, etc.). While porting from one insurer to the other, the policyholder will not lose out on the existing policy benefits such as waiting period and no-claim bonus.
Therefore, don’t just renew your cover without assessing your requirements and evaluating other new options. You don’t want to be short-changed when you make a claim in the future and find that your policy isn’t good enough to completely absorb the financial impact of the claim.