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Importance of Lifetime Renewability in Health Insurance

Published On Feb 06, 2021 5:30 AM By Sakshi Aggarwal

Health insurance is a must for all people as leading a life without getting sick and hospitalized is a mere dream. Several new features are being added to health insurance, to make the health insurance plan comprehensive and user friendly. One such feature of the health insurance policy is its lifetime renewability feature, by which the policyholder gets the right to keep renewing the policy for their lifetime. The health insurance company cannot deny renewal of policy for the insured, and if it does, it has to give a solid reason for denying in writing. This feature is applicable, even if the policyholder filed the claim in the previous year.

Importance of Lifetime Renewability in Health Insurance

With the increase in age, people are prone to many age-related disorders and the premium of health insurance plans also keeps escalating with years. Most private insurance companies do not offer medical coverage after a particular age, but with this lifetime renewability option, the insured can enjoy the benefits of the policy all through their life, without any restriction on age. This option can be of tremendous importance for senior citizens as they need not levy any financial burden on their caretakers. Also, considering the increasing cost of health care, the importance of lifetime renewability in health insurance cannot be underestimated.

What to Expect from the Lifetime Renewability Clause of Health Insurance?

Previously, the renewability of the health insurance will depend on several factors such as the claims made in the previous year. This forced the insurance companies to maintain a claim based loading when the policies were renewed. This increased subsequent premium if the insured made a health claim. This practice indeed made policies costly and forced insurers to refrain from buying adequate insurance cover.

But now that the Insurance Regulatory Development Authority of India, (IRDAI) has made this guaranteed renewability for health insurance policies compulsory, and here is what we can expect from this move.

  • The health insurance policies will now allow their policyholders to renew their plans tenure for their lifetime.
  • There are no age restrictions like before and the policyholders need not render fresh medical declaration at each renewal.
  • Policyholders can easily renew their policy, irrespective of what healthcare claims they have made in the previous policy year.
  • New policyholders will now be eligible to buy a new health insurance plan even at the age of 65 years.
  • The health insurance policy gets renewed throughout the entire course of their lifetime.

Benefits of the Lifetime Renewability in Life Insurance

Inclusion of the lifetime renewability clause in life insurance brings about a lot of benefits for health insurance policy seekers.

  • It has removed the age restriction to renew their healthcare policy.
  • It helps senior citizens to buy health insurance without any hassle and thus aged people will not be denied health cover.
  • The minimum entry age for health insurance is 3 to 5 years and maximum entry age is 65 years and the maximum age to renew the policy is its lifetime.

Bottom Line

But this insurability clause has affected the cost of health insurance premiums. Thus, the premiums of health plans for policyholders over the age of 60 years has increased by 20% to 25%. But this is an excellent option for senior citizens as it helps them with cost-free medical treatment at any age.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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