Why & How You Should Avoid Health Insurance Policy Lapse?
Published On Nov 05, 2019, Updated On Feb 11, 2021
Purchasing a health insurance is of significant importance. After all, it is one of the best ways one can avoid financial instability at the time of a medical emergency. However, to avail maximum benefits of a health insurance policy, it should be renewed by paying the premium amount every year.
Paying premium on time is one of the most important tasks that most of the people forget to do. After buying a new health insurance policy, people gradually start forgetting about its renewal date, which in return, ends in policy lapse. Needless to say, regretting later doesn’t help. Therefore, it is important to emphasise not only policy purchase, but policy renewal as well.
Why Preventing Policy Lapse Is A Must?
Once you have purchased a health insurance policy, keep in mind to remind yourself to pay the yearly premium and become eligible for policy renewal. In case, you fail to do so, there would be no option, but to prepare yourself buying a new policy and encounter:
- Financial liabilities - Once you forget to renew your policy on time, it will lapse, thereby resulting in financial instability. In such situation, if you face an unfortunate medical emergency or demise of your loved one, you will be left with multiple financial instabilities.
- Paying high premium amount the next time - Premium amount is determined on various levels. While in your current policy, you may be enjoying a low premium amount, there are many chances you might have to pay a higher amount if you try to renew your insurance policy after it has terminated.
- Loss of tax benefits - Health insurance policies come with tax benefits under Section 80D of the Income Tax Act, 1961. If you fail to renew your insurance policies, you may no longer be eligible to enjoy such tax benefits.
- Loss of no claim bonus - Renewing health insurance policy every year helps one accumulate no claim bonus, thereby increasing the sum insured. However, policy lapse may end in buying a new one, keeping your sum insured amount same.
- Beginning of waiting period all over again - If you buy a new policy after the lapse of your old one, you will have to face commencement of waiting period all over again.
- Wait for eligibility of pre-existing disease cover - Policy lapse will lead you to beginning of waiting period for covering pre-existing medical conditions. So, you might have to wait for another 3 or 4 years to get your pre-existing diseases covered.
How To Prevent Policy Lapse?
- Choose ECS or Electronic Clearing Service, thereby allowing automatic deduction of the premium from your bank on a pre-determined date and transfer the amount to your health insurer.
- Set reminders or mark in your home/office calendar for policy renewal date so that you can remember policy renewal by all means.
- Allow receipt of payment reminders by means of SMS or e-mail.
- Ask your health insurer to remind you for policy renewal.
- Select the option of paying premium by means of ATM of banks linked with insurance companies.
Things To Keep In Mind
- Try to renew your health insurance policy before the deadline. You can also pay your health insurance premium amount in the 30 days grace period provided by the insurer.
- Health insurance policies allow change of policyholders at the time of renewal. If you wish to do so, make sure you keep it in mind.
- Review your health insurance requirements once again. If there are any new additions to your family or any other changes that ultimately change your health insurance needs, get your health insurance cover adjusted according to the same.
- If you want your sum insured to be increased, note that policy renewal will be the perfect time to do so.
- Policy renewal period is a time you can also choose to invest in a super top up plan to extend your cover.
- Check whether or not there are any changes made in the policy terms and conditions.
- Make sure you disclose any new illness or medical condition to be on the safer side and prevent claim rejection later.
- Once you have paid the policy premium, keep the receipt in a file and inform either your spouse or a senior family member about the renewal and file you are maintaining. You should also inform your TPA to issue revised cashless identification cards.
Many people who go for insurance policy renewal on time, know how fruitful it is in the longer run. You too should become one of them and save yourself from mental and financial concerns.
To uncover more about How to Renew a Health Insurance Policy Online, click HERE.
If interested in talking to InsuranceDekho experts to gain knowledge on policy renewal, initiate contact at 18001205698 without any delay.