Health Insurance: From June 1, policyholders to get renewal reminders from insurers

Prashant Das, 55, went through a tough tough time while renewing his health insurance policy last year. He never got the renewal message from his insurer and he himself forgot to save the premium payment date. The thought struck him one month later when his policy had crossed even the grace period of one month. “I was lucky that I had missed the grace period just by a couple of days. After much persuasion and negotiation, my company renewed my policy, otherwise, I would have lost all the continuity benefits of my policy.” Das said.

There are many like Das who miss their premium renewal dates because of no reminders from the insurance companies. This is because as per policy terms insurers are not obligated to send policyholders renewal notices. This led to many people forgetting their premium renewal dates, because of which senior citizens suffer the most. However, now from June 1, 2021 all general and health insurers have to send a renewal notice one month before the expiry of the policy, mentioning the premium amount due.

Not only renewal dates insurers will also have to send biannual updates on your health insurance policy including the following basic information:

>Name of Product and policy number

> Sum Insured and Cumulative Bonus

> Number of insured people covered under the policy

> Policy period

> Number and amount of claim settled if any

> Balance Sum Insured and Accrued cumulative bonus available, if any,

> Due date of renewal and premium payment frequency,

> Premium amount due on renewal

> Grace Period (within 5 days after renewal due date)

> Toll-Free No. or e-mail Id etc.

Lapsed policies

It is very important to renew your health insurance policy on time as you can lose all your continuity benefits if you don’t renew it on time. For example, insurers generally give a 15-30 day grace for payment of the premium. This helps to keep the health benefits intact. But a claim arising during the grace period may not be settled by the insurance company. Moreover, your health insurance policy does not cover pre-existing ailments until 24-48 months of continuous coverage. If the policy lapses then you will have to start the waiting period all over again.

Most importantly, for every claim-free year, the insurance company gives a no-claim bonus in the form of a higher sum insured. The sum insured increases by 5% for every claim-free year up to a maximum of 50%. No benefit of a no-claim bonus will accrue if the policy lapses.