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Annual renewal of health insurance policy is usually done as a formal process by just paying the premium, but this negligence leads to loss of lakhs of rupees during emergency treatment. Amidst the rapidly changing regulations in the health insurance sector, rising hospital charges and the latest guidelines of the Insurance Regulatory and Development Authority of India (IRDAI), it has become very important for the policyholder to understand whether the protection cover he is paying for will provide full support at the time of actual treatment or not. Many times people renew the policy without reading the subtle amendments in the documents and as soon as they get admitted to the hospital, they realize that the insurance company will not bear the full cost of the room in which the patient is admitted. The first rule of financial prudence is to re-assess the specifics of your medical policy before paying the premium.
At the time of health insurance renewal, first of all you should check the room rent limit present in the policy. Older policies often have a condition that only 1% of the sum insured will be valid as daily room rent, i.e. on a cover of Rs 5 lakh, a room can be booked for only Rs 5,000 per day. If the patient is admitted to a private hospital where the room rent is Rs 7,500 per day, then the insurance company not only deducts the room difference but also applies proportional deduction on doctor’s fees, nursing charges, surgery and ICU expenses. This simply means that out of a bill of Rs 5 lakh, the patient may have to pay Rs 1.5 to Rs 2 lakh from his own pocket. So at the time of renewal, ensure that your policy is upgraded with the facility of ‘No Room Rent Capping’ or ‘Single Private AC Room’.
If you or your family have not taken any claim from the policy in the last year, the insurance company offers you No Claim Bonus (NCB). It is important to clearly see in the renewal notice how much additional amount the company has added as a bonus to your base sum insured. Today, many leading insurance companies offer cumulative bonuses ranging from 20% to 50%, and in some policies up to 100%, for a claim-free year without increasing the premium. If your current company is not offering a satisfactory increase in the no claim bonus, or reduces the entire bonus in one go upon making a claim, you should explore the option of taking a Super-NCB add-on at the time of renewal or porting to another better policy. In times of rising medical inflation, increasing the sum insured without any extra expense proves to be a big security cover.
While renewing the policy, it is mandatory to check any new co-payment or disease-specific sub-limit added in the policy wordings. Co-payment means that a certain portion (e.g. 10%, 20% or 30%) of the total approved hospital bill has to be borne by the insured. Many companies secretly add co-payment clauses to senior citizen policies in the name of keeping the premium affordable. Similarly, a maximum limit or sub-limit is fixed for expenditure on common diseases like Cataract, Knee Replacement, Kidney Stone or Hernia. If the actual expense of an operation is Rs 1.5 lakh and the sub-limit in the policy is Rs 40,000, then the remaining Rs 1.10 lakh will have to be paid by the insured himself. Before paying the premium, ensure that your policy has a provision for zero co-payment and minimum sub-limit.
Insurance companies keep revising the list of network hospitals from time to time based on their rate cards and payment terms with the hospitals. It is possible that the large multi-speciality hospital with which you had originally purchased the policy may have been removed from the cashless network panel of the insurance company this year. In case of emergency, if cashless facility is not available, the patient’s family first has to pay the entire bill from their own pocket and then have to go through the documents and claim forms for weeks for reimbursement. Before renewal, double-check the active cashless list of your home city, district and nearby major medical centers by visiting your company’s website or mobile app to ensure prompt cashless treatment in case of emergency.
The renewal process is not just a paper renewal, but also a chance to update your health status. If any family member has been diagnosed with hypertension, diabetes, thyroid or any new heart related problem during the last one year, then it is very safe from legal and technical point of view to give written information to the insurance company. Although there is usually no new waiting period on renewal, concealment of any significant health change may lead to the company rejecting the claim in future on the grounds of non-disclosure of material facts. If you want to increase the scope of your policy, then you can apply for policy portability just 45 days before renewal, due to which the waiting period spent under the old policy remains completely safe.