Health insurance term ending? Follow these steps to keep it going

Premiums on individual health policies are usually charged on a lump sum basis for a period of one to three years, depending upon the policy term, type of cover, and sum-insured amount.

Health insurance is crucial as it provides financial security to policyholders and their loved ones during emergencies. Still some policyholders often neglect renewing their policy even without making any claims.

Hike in premium renewal rates, similar coverage from employers, and lack of monthly payment facility are some of the reasons they give for not renewing the plan.

What happens when policy term ends?

Premiums on individual health policies are usually lump sum for a period of one to three years, depending on the policy term, type of cover and sum-insured amount. The coverage is valid until the conclusion of the term and choosing to renew the plan often comes with at least a 10 percent hike in premium rates.

When the policy term ends, individuals get a grace period of up to 30 days to make the payment or the policy will no longer be active and any claims are rejected after the deadline. There’s no provision of refund of premiums even if you’ve not claimed any benefits.

Refund is allowed only when the policy is cancelled within the free-look period, which is usually between 15 to 30 days, and there might be cancellation charges applicable.

There are, however, scenarios when the health insurance company decides to discontinue the plan.

“Discontinuation is a part of periodic product modifications to provide better coverage and alignment with increasing and ever evolving healthcare demands rather than a risk assessment for customers,” Manish Dodeja, COO of Care Health Insurance, said.

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What to do when policy term ends?

Usually, the company’s customer care representative will call, text or email for a renewal. Health policies can be renewed by online payments directly on the insurer’s ?website. The policy gets renewed almost instantaneously or within 24 hours.

Individual policy-holders can either choose to continue, as insurers offer additional benefits to holders while renewing existing plan. For instance, individuals earn a No Claim Bonus (NCB) that increases existing sum-insured amount.

One can also opt to port the policy to a different insurer without losing benefits instead of renewing the plan. This doesn’t mean buying a new policy but simply porting your existing plan, its benefits and sum-insured amount to the new insurance provider.

The Insurance Regulatory and Development Authority of India (IRDAI) mandates that the portability process should start at least 45 days prior to the end of policy term. Your existing health insurance company will share the details with IRDAI during the porting process.

Similarly, if the policy-holder chooses to migrate to a different plan during renewal, in such cases the criteria of waiting period for pre-existing disease may get waived. One needs to confirm with the insurer first to ensure continuity benefits are not lost. There's usually a 36-month waiting period for pre-existing diseases (if any), which are diseases diagnosed before getting a new health plan.

“To assure continuous health coverage, it is critical to periodically explore alternative possibilities, properly analyze benefits and constraints of existing policy if any and migrate your policy to a comprehensive one,” said Dodeja.