Top Mistakes to Avoid When Renewing Your Health Insurance Policy

 

Introduction:

Renewing your health insurance policy may seem like a routine task — pay the premium and continue your coverage. But this simple process can become costly if you overlook certain critical aspects.

Many policyholders make common mistakes that can lead to:

• Loss of accumulated benefits

• Higher premiums

• Rejection of claims

• Inadequate coverage in times of need

This article uncovers the top mistakes to avoid while renewing your health insurance policy so you can make smart, informed decisions that protect your health and finances.

1. Missing the Renewal Due Date

One of the most common (and costly) mistakes is missing the renewal deadline.

Consequences:

• Policy Lapse: Your health coverage ends immediately.

• Waiting Period Resets: Pre-existing diseases may have to go through a fresh waiting period.

• Loss of No-Claim Bonus (NCB): You lose any NCB you accumulated for not making claims.

• Medical Re-Underwriting: You may need to undergo health checks again.

Solution:

• Set reminders via phone/email/calendar.

• Use auto-debit or ECS facilities for hassle-free premium payment.

• Many insurers offer a grace period of 15–30 days — don’t wait until the last minute!

2. Not Reviewing Your Coverage Needs

Your health needs evolve with age, lifestyle, and family conditions. If you blindly renew the same old policy every year, you might:

• Be underinsured in times of crisis

• Miss out on better features or new benefits

• Pay extra for things you no longer need

What to Do:

• Review your sum insured – Has medical inflation increased?

• Check for new add-ons like OPD, maternity, or wellness benefits.

• Add new family members like a newborn or spouse, if applicable.

• Consider top-up plans if premium hikes are too high for higher coverage.

3. Ignoring Pre-Existing Diseases (PED) Clauses

Many policyholders do not disclose pre-existing illnesses or forget to re-check the waiting period during renewal.

Risks:

• Claims related to such conditions might get rejected.

• Some insurers reduce the waiting period after continuous renewal — don’t miss the opportunity.

Smart Tip:

• Always read the policy document for updates on PED clauses.

• If the waiting period is over, you’re eligible for coverage — confirm it explicitly.

4. Not Porting the Policy at the Right Time

If you’re unhappy with your current insurer’s:

• Claim settlement process

• Network hospitals

• Premiums or service quality

…you can port (switch) your policy to another insurer without losing benefits like NCB or waiting period credits.

Mistake:

Many people don’t know that porting is allowed only at renewal time.

What to Do:

• Start porting at least 45 days before renewal.

• Compare plans using online platforms like Policybazaar, Coverfox, or insurer websites.

• Ensure continuity of benefits is clearly documented when switching.

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5. Skipping Reading of Renewal Documents

Most of us hit “Renew” without reading the terms and conditions. Big mistake!

Why It’s Risky:

• Insurers sometimes revise exclusions, add co-pay clauses, or increase premiums.

• You may not realize a hospital/benefit is no longer covered.

Best Practice:

• Check for changes in policy wording every year.

• Confirm details like room rent limits, network hospital list, co-pay %, exclusions, etc.

• Don’t hesitate to contact the insurance company or agent to clarify.

6. Ignoring Add-ons and Riders

Add-ons enhance your base policy coverage at a nominal cost, but most people ignore them.

Valuable Riders Include:

• Room Rent Waiver

• OPD Cover

• Maternity & Newborn Cover

• Personal Accident Cover

• Wellness/Preventive Health Check-up

What You Should Do:

• Match add-ons with your lifestyle and life stage.

• For families or aging parents, critical illness or domiciliary hospitalization cover might be useful.

7. Not Checking the Insurer’s Claim Settlement Ratio (CSR)

A lower premium doesn’t always mean a better deal. If the insurer has a poor Claim Settlement Ratio, your claim might be delayed or denied.

What to Check:

• IRDAI Annual Report publishes CSR of insurers.

• Look for insurers with CSR above 90% and good customer reviews.

• Also check average time taken to settle claims.

8. Overlooking Tax Benefits

Under Section 80D of the Income Tax Act, you can claim deductions for health insurance premiums:

Tip:

• Always ask for a premium payment receipt for filing income tax returns.

• Plan renewals in the same financial year to claim the deduction on time.

9. Neglecting the Importance of Cashless Network Hospitals

A major benefit of health insurance is cashless hospitalization. However, many policyholders forget to check:

• Has the hospital network changed?

• Are your preferred hospitals still included?

If not checked:

You may have to pay out-of-pocket first and claim later, which defeats the purpose of having insurance.

Stay Safe:

• Visit your insurer’s website and search for updated network hospitals.

• Prefer insurers with wide hospital networks in your city/town.

 10. Choosing Premium Over Protection

Many people blindly go for the cheapest plan, ignoring:

• Low coverage limits

• Hidden sub-limits

• High deductibles

• Limited disease coverage

Why It’s a Mistake:

The cheapest policy might turn out to be the costliest in an emergency.

The Smart Way:

• Compare benefits vs. premiums

• Understand what’s not covered

• Choose comprehensive coverage at a reasonable premium

Renewal Checklist – Quick Summary

Final Thoughts

Health insurance is not just another yearly payment — it’s your lifeline during emergencies. Renewing it mindfully ensures you’re always protected, financially and medically.

By avoiding these common mistakes, you ensure:

✔️ Uninterrupted coverage
✔️ Continued tax benefits
✔️ Access to the best care when needed the most

Remember, a smart renewal is just as important as buying the right policy in the first place.

FAQs

Q1: Can I increase my sum insured during renewal?
Yes. Most insurers allow you to upgrade your coverage, though underwriting may apply.

Q2: Will I lose my NCB if I switch to a new insurer?
No. You can port your policy and retain NCB, provided conditions are met.

Q3: What happens if I renew after the grace period?
Your policy will lapse, and you’ll lose continuity benefits. You may need to buy a fresh policy.

Q4: Can I change from individual to family floater at renewal?
Yes, you can switch policy types, but inform your insurer in advance.