The benefits of a health insurance policy are numerous.
It offers a protection coverage to the policyholder against insanely-high medical expenses; just like any other insurance plan. It protects your family and you against the rising costs of hospital expenses and medical procedures. With the right health insurance plan, you can save your pocket from burning a hole.
The importance of having an appropriate health insurance plan has been covered in-depth by leading insurance agencies across the globe. In fact, as a policyholder, the chances are that you know more about the importance of having health insurance more than me having consumed so much content.
Interestingly, what you might not know about health insurance is how to renew one when you have one. You should bear it in your mind that if you fail to renew your health insurance plan before its expiry, your policy could lapse. Many policyholders fail to renew their health insurance plans on time. Here’s how you can not be one amongst them.
How to deal with a lapsed policy
If your policy does lapse due to some reason, it will no longer offer you the protection that it currently does. It will no longer provide you with monetary benefits. And so, if you fall ill during that period and have to be admitted to the hospital, you will have to bear the expenses on your own. The worst part – the insurance company will not cover the costs at all.
Your best shot in such circumstances is to go for policy renewal. This will prevent you from buying a new policy which can be costlier than the one you previously bought. You should immediately get in touch with your insurer or insurance agent to find a way to renew your policy.
In any case, you should keep the following things in mind when you’re looking for health insurance renewal.
- Look for grace period renewal
Grace period refers to the duration for which the policyholder is given time to renew their health insurance policy. During this grace period, they do not lose the benefits provided to them by the insurance company. If they fall ill and have to be hospitalised for some reason, they will still be covered by the insurer.
Furthermore, the policyholder will be given a notice period to pay their dues to the insurance company before it expires. The grace period varies from each insurance company and can be anywhere from 15 to 30 days.
- Keep documents ready for policy renewal
Depending on whether you’re going to renew your policy online or offline, you are going to need soft or hard copies of some critical documents.
You are going to need copies of identity, age, and address proof, including a copy of the previous policy. You will also need to submit a copy of your latest medical reports along with a new proposal form. Additionally, keep a few passport-size photographs handy.
It is also advised to keep scanned copies of all these documents ready in case you are going to file for online renewal of your health insurance plan.
- Steps to renew policy offline
This is the fastest way to renew your health insurance policy. Also, keeping in mind the ongoing pandemic crisis, it is advisable not to take all things online. You could choose to do it via the app or the website depending upon your ease with the medium.
With both the app-linked or the website-linked portals, the insurance company will require you to have an active account. Using this account, you can re-work your policy (if need be), recheck coverage, select add-ons (if required) and make the final payment to renew your policy.
- Saving time is important
The conventional method of walking into your nearest branch of the insurance company is the most sought-after by many people. Although a much more time-consuming process, you will have to do a lot of paper-work, as guided by your insurance agent or the insurance company. Since your insurance agent is involved in the entire process, the course will be less stressful for you as you can leave the hassle to your agent. All you will have to do is go through the paperwork and make the payment.
What to keep in mind before renewing your health insurance policy
If you are not happy with the features of your current health insurance policy and are looking forward to buying a new one, there is no point renewing it.
It could be for reasons like renewing your insurance for extra protection against critical illnesses, taking care of your health, or just upgrading to a better plan.
Even during renewal, your insurer can ask you to take a health check-up at any time. You do not want anything to flare up at that point.
Secondly, renewal is the best time to opt for unique add-ons in your health insurance policy. Depending on your new needs and requirements, you can opt for customized add-ons.
Lastly, you should always review and re-read the terms and conditions of the renewed policy and look at the fine print for any discrepancies. Make sure that you consider the final coverage amount as well.
Consequences of a lapsed policy
Understandably, a failure to renew your health insurance plan on time can lead you to lose many benefits.
As per the policy clauses, you will lose the ‘no claim bonus’ offered by your insurer. Which means, that if you don’t claim the insurance benefits in a year, you will not be entitled to file for a ‘no claim bonus’ if your policy has lapsed. The ‘no claim bonus’ value will drop to zero the moment your policy lapses.
It is a no-brainer that you will ultimately lose the financial coverage offered by your policy. When your policy lapses, you will have to pay your medical expenses out of your pocket.
The insurance company will not count the waiting period when your policy lapses. The waiting period is the duration wherein the insurer does not attend to claims related to specific health issues.
If you continue to renew your policy on time, the insurance company will allow lifelong renewability of the health insurance plan. If you fail to renew your policy on time, you could lose this benefit.
Additionally, you could also lose the portability benefit of your health insurance company. It allows you to port from one insurance company to the other if you renew your health insurance plan on time.
Consequently, if you fail to renew your policy after it lapses, you will have to buy a new policy. This new policy will be at a much higher cost than the last one that you owned. Act fast and keep your premium for opt for an alternative like term insurance plans!
Author Bio: Shriya Garg is the founder of ContentNinja, who always happens to go back to her roots as a finance professional. Being good with numbers, she loves educating her team members on personal finance, investment, and other things they don’t teach at school.