Policyholders with an existing health insurance have covered risks emanating from health conditions. But once in five-six years, it may be prudent to revisit the policy in light of new features in the market, the limits covered by the policy, the relevant information exchanged with the insurer and family conditions.
Health insurance being a yearly contract with accumulated benefits, there is a certain flexibility to exercise upward mobility in the policy conditions for the benefit of the policyholder. By being aware of one’s own needs or available options, existing health insurance can be revitalised to serve its function.
Window shopping
The competition in health insurance is increasing, and so are the features on offer. Even the regulator, IRDAI has stepped into the act to improve product applicability. So compared to policies issued five-six years ago, the new features are a significant improvement. Even in basic features of no claim bonus, hospital room sub-limits, and OPD consultation there have been sea changes in the last couple of years. Legacy policyholders should browse through the current policy conditions to keep one self-aware.
A conversation with current insurer about new features, possible ways of upgrading existing policy and the costs attached with the same can shed further light. Policyholders will have to make a make or buy decision - if the new feature is worth the possible hike in premium or to break the mould for a fresh start.
Policyholders unconvinced about a status quo or a minor improvement over the standard, should consider porting to a new policy rather than a new policy itself. Policyholders can carry the benefits of their old policy into a new one, ensuring that earlier benefits accrued are passed on. After ensuring the new policy addresses critical gaps, one can apply for porting 45 days before renewal date. IRDAI allows porting from one insurer to another including the benefits accrued including the sum insured, no claim bonus, specific waiting periods, waiting periods for pre-existing diseases, and the moratorium period.
Top-up
The sum insured in existing covers, especially those ranging from ₹2-5 lakh may seem insufficient in the current context. Post the pandemic, medical inflation has risen to double digits and the medical cost has risen significantly. The technology in medicine, pharmaceuticals, surgery and other care measures have also expanded. These new applications are at a higher cost addressing previously unmet needs, which also necessitates a higher health cover. Also with rising age, the relevance of health insurance increases making it prudent to increase the cover.
It may be prudent to ensure that one is already getting the most from the existing policies. Health insurance policies contain no claim bonus which can potentially increase the sum insured by 100-200 per cent above the basic sum insured, not to mention a top-up/super top-up. Top-up or super top-up plans are purchasable riders, which offer additional coverage for medical expenses that breach the original sum insured’s deductible limit. If the sum insured falls short for one single claim, a top-up is triggered and a super-top is triggered when the sum insured falls short across all the claims made in the year cumulatively. A ₹5-25 lakh top-up plan would cost anywhere between ₹800 and ₹2,000 per year across insurance providers compared to the base sum insured of ₹5 lakh and annual premium cost of ₹8,000-16,000 per year.
Prompt information and family status
In the period the health insurance was first contracted to today, there may have been several changes in the health or family conditions. This must promptly be conveyed to the insurer. The insurer on their part should clarify the pending premium payments if any, to keep the policy validated.
Any health condition that has occurred but not updated with the insurer, has to be conveyed to the insurer. This is to ensure that at the time of claim servicing the chances of rejection on account of inadequate information is not applicable.
Also, check for PED waiting period of four years (earlier rule which now has been shortened to three years) is in line with expectations. The moratorium period of eight years (again shortened to five) is a period after which the chances of rejection are diluted. This also has to be checked, if it is in line.
Family status may have changed in the period including a new infant added to the family. Those in family floater policy should update the insurer appropriately.
