Health insurance plans are essential, particularly given India’s rising medical costs. It protects against financial setbacks when receiving medical treatment. However, remember that most health insurance policies are only available for one year and must be renewed annually.
While some insurers may send you a renewal notice before your policy expires, others can leave it up to you to renew. However, a few companies will provide a brief grace period (usually between 15 and 30 days) following the end of your policy period.
Although you may not have health coverage during the grace period, you may have the opportunity to renew health insurance policy and receive continuity benefits. If you renew the policy on time, it can lapse, and you might retain several benefits that come with policy renewal. Cumulative bonuses and waiting periods are examples of these. That is why it is critical to renew your policy on time.
6 consequences of failing to renew your health insurance on time
- Coverage interruption –
Your policy becomes inactive when you fail to renew your health insurance on time and pay the premium within the grace period. This means that any claims filed between expiry and renewal can be rejected.
When your policy expires, you must purchase a new health insurance policy; you may not be covered for any medical emergencies or hospitalisation during this time. You shall be responsible for all healthcare expenses out of pocket.
- Longer waiting times –
As previously stated, you must purchase a new health insurance policy when your policy expires. In this case, your previous policy’s waiting periods can also expire. These include waiting periods for pre-existing diseases, maternity benefits, and various other treatments and conditions you may have to repeat from the beginning.
- You can lose your cumulative bonus –
If you do not file any health insurance claims during the policy year, you can be eligible for a cumulative bonus at renewal.
This is when your insurer raises your sum insured without charging you any additional premium. However, renew health insurance online or offline before it expires, or you can miss out on this bonus.
- Higher-priced premiums –
If you do not renew your health insurance policy on time, you must purchase a new policy. When you do not renew, new health insurance is calculated from scratch, and you may pay a higher premium than if you had continued the policy on time due to both the lapsed policy and your age. As a result, renewing an expired policy is more expensive.
- Medical exams could be necessary –
When your policy expires and you need to repurchase it, your insurer may require you to undergo some medical tests or check-ups to determine the state of your health before issuing the policy. This lengthy process could delay receiving the procedure, during which time you may be without coverage.
- Loss of income tax advantages* –
When you pay a health insurance plan for yourself, your spouse, your parents, or your children, you can claim tax benefits* and returns under Section 80D of the ITA 1961. However, if you do not renew your policy, you will forfeit your tax-savings for that year.
*Tax benefit is subject to change in tax laws
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘
