It is sinful not to renew your health insurance on time! Well not really, but, if you don’t then you will miss out on the many benefits and an opportunity to port.
Several studies and reports are showing the impact healthcare-related costs can have on you and your savings. Rising healthcare costs can burn a deep hole in your pockets. Having an insurance safeguards you and your family again such situations. But, this is not the end of the cycle. Renewing your health insurance on time is important. There can be some harsh consequences if you fail to do so. Sheer negligence or at times genuine reasons catch us off guard. We miss renewing health insurance on time which is troublesome.
Missing Your Renewal
- If you do not renew your health policy on time, it gets nullified. There is a grace period of 7 to 15 days depending on the insurance provider once the due date is crossed. But, failing to renew it within this duration leads to the lapse of the policy. To avail these benefits again, you must purchase a new policy. This means you must undergo the entire process all over again.
- On purchase of a new health insurance, there is a duration of no coverage. Most insurances do not provide any health coverage for the first 30 days since their inception. But, this does not include accident-related cases. If you renew your insurance on time, you do not have to wait for another 30 days to benefit from your insurance.
- One of the major hindrances in purchasing a health insurance is the waiting period. Long waiting periods for certain conditions avert people from buying these policies. This can be taken care of with ease if you renew your policy on time. For instance, the waiting period for a certain disease or medical condition is about 4 years. On-time renewal can get the period down to 3 years. But, missing out on renewing the policy on time, resets the waiting period clock. You then have a new policy to buy and a waiting period of 4 years.
- Insurance companies have a way of saying thank you for staying fit and healthy. This is expressed through No Claim Bonus (NCB). This cumulative bonus increases your health coverage by a certain percentage. The NCB is about 5% to 10% per year. It keeps adding up till 40% to 50% as defined by insurance companies. Thus, on-time renewals allow for you to carry-forward the NCB for the next consecutive year.
- Non-renewal resets the NCB to zero.
How to Avoid a Policy Lapse?
- The good old way or circling the renewal date on your calendar can get the work done. With new technology, you can set up an event reminder on your smartphone.
- You can also opt for ECS mandates. This would allow the insurance companies to deduct the premium amounts from your bank account. As the insurance companies carry out the deductions, you can stay at ease.
- Opt for reminders via SMS or e-mail. You can extend the benefits by using SMS and e-mail services to remind yourself of policy renewals.
- Several insurance companies also have tie-ups with banks. This allows them to leverage their relationship. You can now renew your policies even from bank ATMs.
- If you have somehow missed the renewal date, there is still a grace period available. Make the most of it. Renew the policy within the timeframe to make the most of it. Thus, the duration includes calendar days (working and non-working). Not renewing within this duration also leads to policy lapse.
There has been a surge in information flow for health insurances. More people are now aware of the need and benefits of health insurance. But, it is not a one-time event. It needs yearly renewals. Timely renewal will keep your policy and money intact. This will provide you with a smoother experience.