Know Your Rights On Health Insurance Policy Cancellation
Updated On Apr 08, 2021
In today’s time, owning a health insurance plan is not just limited to being a choice but has become a major necessity. Other than from purchasing a health insurance plan for yourself, you can even consider purchasing a health insurance plan on family floater basis to ensure the protection of all the members in your family, so that they get right coverage at the right time in case of any medical emergency.Being aware of health insurance rules (terms of services) is as important as buying a health insurance plan. And among such rules is about health insurance cancellation.
You read that right.
All the policyholders who are convinced that their health insurance plans do not match their expectations are allowed to cancel the policy and get a refund, provided they have not made any claim in the policy during that year. Although, a policyholder can cancel their insurance plan anytime, without needing to serve any waiting period yet the refund that is payable to them is dependent upon the time when they have cancelled their health insurance plan.
What the policyholders need to do for this is to provide the insurance company in writing about their intention.
Cases of Cancellation
The policyholders can cancel their health insurance plans during the free look period or anytime after the free look period.
Let us understand them below:
Case 1: Cancellation During Free Look Period
Freelook period is the first 15 days of an offline policy and the first 30 days of the online health insurance policy. In case the policyholders do not agree to the terms and conditions of their health insurance policy, then they can cancel the policy during the free look period and get up to 100% of the refund. But the insurance company will deduct the premium for the number of days they were covered for and any cost incurred for their medical tests and stamp duty.
Case 2: Cancellation After Free-Look Period
The policyholders also have an option to cancel their health insurance policy after the free-look period, but will not receive a 100% refund of the premium paid. If they cancel the policy
- Within a month, then you will receive 75% of refund of premium
- Within 3 months, then you will receive 50% of refund of premium
- Within 6 months, then you will receive 25% refund of premium
Note that the policyholders have the right to cancel their health insurance policy anytime between 6 months till the policy term. But they will not receive any refund in that case.
If the policyholders wish to cancel their health insurance plans during this period, then they can write to their respective health insurance companies about their intention and they will get the premium refund.
The other case of policy cancellation is after the free look period where also the insurance companies partially refund the premiums. In both cases, the policyholder should not have made any claim.
Once the policyholder realises that the policy he/she has purchased is not satisfactory, he/she can communicate about policy cancellation to the insurance company. Some health insurance companies have a standard policy cancellation form which the policyholders are required to fill during the free look period. Details of policy, the reason for policy cancellation, date of receipt of the policy document, etc. needs to be filled in the application form.
The insurance company, on receiving the cancellation request contacts the policyholder to share the reason to cancel the policy and suggest possible solutions. But if the policyholder still wishes to cancel the policy, then the insurance company will have to process the request and initiate a refund.
Now that you are aware of your rights to health insurance policy cancellation, here are the steps to do the same:
- Contact the support team of your insurance provider to proceed with the cancellation request.
- Usually, you are required to send a written request offline or online with your policy details and a reason for why you want to cancel your health insurance policy.
- Once the insurance company receives your cancellation request, it will try to offer you a solution in case you have issues with the current policy. But if you are still not satisfied and want the policy to be cancelled, then the process will be initiated.
- On the basis of the period for which you were insured and after a few other deductions, the insurance company will send you the refund of the premium.
- You will also get an official cancellation Email or a letter from the insurance company.
While it is not a good option to cancel a health insurance policy but if you have decided to do so, then you must keep all the above-mentioned details in mind.
What will be refunded?
Every insurance company has different refund grids. But generally, the companies pay back the premium amount paid by the policyholders after deducting the following -
- The prorated risk premium for the covered period
- Expenses incurred by the insurance company on medical examination
- A small amount as ‘administrative charges’
Now you know that health insurance cancellation is no rocket science, you can invest in health insurance without any worries. Even if you don’t like your plan, you can cancel it under specified circumstances.
The policy wordings of your health insurance plan will have all the information related to how the premium is calculated for a refund and it won't be a tedious task at all.
Still, if you have any confusion, you can get in touch with the customer care on the toll-free number 1800-1205-698 and solve your doubts.
You may also like to read OPD Expense Coverage: 5 Health Insurance Policies That Cover OPD Expenses