Things to keep in mind while renewing health insurance

With rising costs of medical care and an unusually high number of claims due to the Covid-19 pandemic, it is no surprise that the past few months have seen a rise in health insurance premiums. This, coupled with abnormally high rates of inflation, may seem like a cause of concern to policyholders.

According to a recent study by Motilal Oswal Financial Services, India has the highest rate of medical inflation among all Asian countries with a 14% increase in the cost of medical care in 2021. This is higher than China (12%), Indonesia (10 %) and Viet Nam (10%). So despite the hike in premiums, one must not ignore the importance of having yourself and your family covered. Here are a few things to keep in mind while renewing your health insurance policy in the face of higher premiums:

Renewing vs buying

The first question that may come to your mind would perhaps be “why should you pay a higher premium for the same policy when you may get a cheaper alternative plan in the market?” However, you must remember that continuing your health insurance policy comes with several benefits. First, you get no claim bonus in the form of enhanced coverage. Moreover, you may have already completed the waiting period for certain specified items. If you let your policy lapse, you may have to start the waiting period again. Although, as per the latest rules, you can switch to a new policy from even a different insurer while retaining some of the benefits, especially related to waiting periods. In any case, don’t decide in haste.

Review sum insured

With the cost of medical care rising, the sum insured that you may have thought was enough a few years back may no longer be enough. The time of renewal is a great opportunity to revisit the sum insured and enhance it if required. One could consider going for a Rs 50 lakh to Rs 1 crore cover, as they have become quite affordable. For instance, a Rs 1 crore health insurance can cost as low as Rs 10,680 per annum if you buy it at 25 years of age.

Explore EMI options

For many people, the rising health insurance premium could come as an unexpected setback at the time of renewal as they did not plan for this additional expense. To overcome this, you could explore EMI options, which are now available for paying the premium with most insurers. So one does not have to worry about paying the entire annual premium in one go and can simply make affordable monthly payments.

Consider add-on benefits

The renewal date of your policy is a good opportunity to consider adding some additional riders to your current policy. When buying the policy, you may not have given a lot of thought to additional rider benefits to complement your policy, you could do it now.

For instance, you could add a room rent waiver benefit which allows you to opt for a room with a higher sub-limit, or without any sub-limits. You could also choose a critical illness cover. If you married recently, or are planning to,
you could add a maternity rider to your plan. There are several other add-on benefits that you can use to customize your policy.

Go long-term

Several insurers offer two and three-year health insurance policies these days in which you can avail of a discount on the premium. This is better than going for a one-year policy, followed by renewal. Not only do you get an upfront discount, but you are also protected from a hike in premium that may come next year. It is wise to consider a long-term plan if the option is available.

Do not be scared of the hikes in health insurance premiums. While it does pinch the pocket, just remember that the little extra that you pay would cover you against a much higher risk. Moreover, you must focus on getting the right coverage and right add-on benefits to make up for the extra money you pay for getting yourself covered.

(The writer is the business head of health and travel insurance at
policybazaar.com)

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