Health is the biggest asset we own. However, there’s always risk involved with matters related to health. Increasing hospitalisation and medical costs mean that families have to sometimes dip into their life’s savings to meet those expenses. Hence, it is important to have adequate health insurance to cover such costs.
However, health insurance needs to be renewed every year. Here are the things you need to keep in mind before renewing your health insurance policy.
Stick to the renewal date
In health insurance, on-time renewal is critically important because every policy has some exclusions for one-three years. In some cases, for any pre-existing illnesses, there are exclusions for four years. Simply put, certain conditions are not covered for the number of years they are excluded from the cover.
“In order for these exclusions to go away, the policy needs to be continuously active. If there is a delay in renewal, this continuity may be lost and the exclusions will again be applied for a new policy,” says Chenthil Iyer, founder, and chief strategist, Horus Financial Consultants.
Analyse health risks and needs
Health risks and needs vary depending on age, financial circumstances, gender, and work-life balance, among others. One needs to carefully assess and analyse the risks involved before opting for health insurance.
When renewing a policy, any change in health conditions must be reported to the insurer to avoid trouble later when you need to make a claim.
Relook at the policy sub-limits
In the post-pandemic era, it is recommended that you relook at your policy to check the sub-limits applicable.
If your policy has a sub-limit of Rs 5,000 or Rs 10,000 as per your sum insured for room rent per day, you can claim only that much towards room rent. Moreover, usually, the cost of other treatments and procedures in the hospital depends on the room rent paid.
“We have seen how high the room rents went up during the pandemic in certain private hospitals. Therefore, even if you have to pay a higher premium, it's better to renew into a policy without such capping or sub-limits,” adds Iyer.
If you have lower sub-limits for room rent and other treatments, consider increasing them even if it means paying higher premiums.
Analyse if you need to bump up your sum insured
As far as the amount of insurance is concerned, it's better for a family of four members to have a cover of at least Rs 10 lakh. If your existing policy is below this value, you must consider increasing it to avoid a major erosion in your savings due to some unwanted circumstances. You could also consider top-up health insurance to increase the overall sum insured for your family.
Policy porting
Lastly, you must look at the quality of service you are getting from a company. “If you are dissatisfied, you may take advantage of health insurance portability to move your policy to another company of your choice at the time of renewal. For this, you may have to intimate the new company a couple of weeks before the renewal date,” says Iyer.
If you’re not satisfied with your existing policy benefits, you could switch to another insurer, without hampering the policy continuation benefits. One needs to inform the insurer about the same a month in advance.
All said and done, having adequate health insurance is the first step towards planning one’s finances.
