DT Personal Finance: Review health insurance renewal coverage carefully

CHENNAI: When you purchase health insurance, you need to pay premiums every year to keep it active. But many people just pay premiums each year without regard for whether the coverage still fits their needs or not.

So, at the time of renewal, it is important to take some time to see if your health coverage still works for you. Its best to do this every year but if not, make sure to check every 2-3 years or when something big happens in your life. How can you do it? Here are a few pointers to help you –

1. Increase in No. of Family Members – If you got married recently or had a child, then it is extremely important to ensure your health insurance coverage reflects this change. Be proactive and add the new family member to your existing health insurance plan as soon as your health insurer permits. You don’t want to be in a situation where you delayed adding them to your health plan and then out of the blue, there was a health claim to be made. Some people delay this as adding additional members increases your premiums. But that is okay. This is a small cost to pay to guarantee comprehensive protection for your growing family.

2. Is Insurance Cover Still Big Enough? Consider a scenario where five years back when you were unmarried, you got a health insurance policy with Rs 5 lakh coverage. However, since then, you’ve experienced significant life changes such as marriage and parenthood. Given the escalating costs of medical expenses, its obvious that the current Rs 5 lakh coverage is no longer sufficient. So, it is in your family’s best interest that at the time of renewal, not only do you get new members added but also increase the insurance cover size that aligns with the increased medical costs and your changing circumstances. You can have the cover increased by either increasing the base cover itself or you can go for a super top-up insurance plan.

3. Better Alternatives – Given the competition in the insurance sector, insurance companies regularly update and launch new health plans. Some of these new plans might have benefits that your current one doesn’t offer. It’s a good idea to check and compare your current policy with the latest options available. And if the new policy has a feature/benefit which is really useful, then you can consider porting your old policy to the new one. You should check how this will change your premium and whether there will be any loss of existing no-claims benefits or not. Once you have checked on these fronts, you can initiate porting.

But let me remind you that you just can’t port from one policy to another any time you wish. It can be done only at the time of renewal and you have to inform the insurance company at least 45 days before your existing policy’s renewal date.

It is necessary to ensure that you review your health insurance (as well as life) requirements once every few years.

And we discussed how personal requirements may change. But at times, what happens is the insurance company themselves might make certain changes to policies (or propose them) and change premiums along with policy features.

So, if some of the policy changes aren’t beneficial or useful to you, then also you can choose to look for alternatives instead of blindly accepting what the insurer is proposing.

And that reminds me, please don’t just depend on corporate health insurance. If possible, get yourself one of your own which is not dependent on your employment status.