Rethinking your medical cover at the time of renewal is a healthy habit

There was a time when most people in our country did not see health insurance as critical. After two tumultuous years of the COVID-19 pandemic, however, this is no longer the case.

As an element of stability amid uncertain events, health insurance has taken its rightful place as an essential part of financial planning for every household. The next important step in this evolutionary process is to ensure that one has the best-fit health plan.

Last year, India witnessed a 14 percent medical inflation rate, the highest in Asia. As a result, health insurance premiums skyrocketed, making protection more expensive for consumers. Rising medical costs make for a great reason to evaluate one’s health insurance needs.

The best time to do this is when your policy is up for renewal. This helps you avoid any need for an additional waiting period for enhanced coverage.

Renewal time is when a responsible policyholder should choose to pause, rethink and thoughtfully upgrade. Here is what you need to keep in mind to get maximum coverage when upgrading your existing plan.

Also read: Health policy premium hiked at renewal? Port out to a new insurer

Reassess your sum insured

Renewal should be treated similar to an annual physical check-up. You go to the doctor once a year to have your health assessed. Similarly, before the policy renewal date, you should review and evaluate your health insurance coverage.

Your current health insurance coverage may not be adequate to meet all of the healthcare needs that could arise. Perhaps it is not in line with the rapidly rising costs of healthcare. Every insurer gives you the option of increasing your sum insured at the time of renewal.

The benefit is that there is no waiting period, unlike switching to a new health insurance plan, which may have a four-year waiting period for pre-existing diseases. In the post-Covid world, a health insurance policy worth at least Rs 1 crore is essential for every individual.

Also read: How much health insurance cover do you need?

Go for a super top-up plan

Sometimes in the case of hospitalisation, the bill could exceed the existing sum assured. To avoid being in that sticky situation, it is advisable to buy a super top-up plan. This allows you to create a failsafe security net without having to opt for a higher premium or purchase a different policy.

For example, if you already have a Rs 10 lakh health insurance cover, you can purchase a super top-up plan with a sum assured of Rs 90 lakh and a Rs 10 lakh deductible.

It is easier for hospitals to coordinate with one insurer at any point of time, so it makes sense to purchase a super top-up plan from your existing insurer. Super top-up plans also cover pre- and post-hospitalisation costs, as well as pre-existing diseases (with a waiting period) and daycare procedures. The premium paid for super top-up plans is also tax deductible under Section 80D.

Consider porting

If your current policy has started falling short of your needs, or the level of service you’re receiving from your current insurer, you can use the time of renewal to port your policy.

This means you can transfer your current policy to a different insurance company of your choice while keeping the continuity benefits you’ve accrued.

Remember that portability can only be done at the time of renewal—also, you must notify your current insurance company 45 days before your policy’s renewal date.

Declare any new illness or condition

Renewal of health insurance is essentially a new contract with the same terms and conditions as in the previous year. However, your health profile may change dramatically over the year.

If you read the policy terms and conditions carefully, you will notice that while the insurer cannot load the policy due to a negative claims experience (due to Insurance Regulatory and Development Authority of India regulations), it can request documents/information before agreeing to renew the health insurance policy.

To be on the safer side and in the spirit of the principle of utmost good faith, it is advised to notify the insurer about any such changes. Allow it to make a decision on your policy based on that, rather than risking rejection at the time of claim. This ensures that you get maximum coverage even in the most unpredictable situations.

All in all, renewal time is the time to go through your insurance needs with a fine-tooth comb and to amp up the protection where necessary. The earlier you maximise your coverage, the better it is as it saves you the risk of an inflated premium.

So, be cautious and make the best use of your health plan renewal—it can be quite an opportunity to safeguard yourself and your family.