Don’t Auto-Renew Your Health Insurance Blindly: Here Is Why

When renewing a policy, it is important to consider the renewal as a review of your current policy and not blindly renew it without review. That can turn out to be a costly mistake, according to a post on X by Beshak.org insurance. The tweet warns that health insurance renewal should not be a one-click payment. Here is why.

Before paying the renewal premium, the insured should verify the sum insured, check the term of the policy, and review if there are any changes in the premium rate, exclusions (if any), and waiting period. “One must also look for deductibles, copayment clauses, and claim settlement benefits. They must also assess if the existing coverage is still sufficient considering their medical needs and medical inflation,” says Sarita Joshi, head of life & health insurance, Probus.

“Also, you should review your claim history to ensure your current coverage is adequate given the increase in medical inflation and health care needs. Finally, you want to make sure to verify the network list of hospitals and be aware of any change to policy conditions and benefits that may be added or deleted during the renewal process,” says Arun Ramamurthy, co-founder, Staywell.Health.

Which Riders And Add-Ons Are Worth Keeping?

An individual's health status, family background, and financial need ultimately determine if a rider or add-on will be useful. Benefits such as critical illness coverage, restoration of sum assured, outpatient department (OPD) coverage, maternity benefits (for future family planning), and personal accident cover may provide a valuable level of protection under certain circumstances. However, it is prudent for policyholders to assess their continued need for certain optional benefits on a periodic basis.

“Optional benefits that are not expected to be used or that duplicate employer-provided coverage will increase premiums without providing a corresponding value. Therefore, the primary goal should be to keep optional benefits that will provide protection from the actual risk(s) of needing healthcare, rather than just collecting as many optional benefits as possible,” says Ramamurthy.

When To Consider Porting Or A Super Top Up? 

“Dissatisfaction with the insurer's service, inadequate network hospitals, limited policy coverage/features, poor claim experience, etc., could be some of the factors for considering porting the policy or buying a super top-up instead,” says Joshi.

Super top-up plans are particularly beneficial for those who currently have an adequate base policy through an employer or individual but need more protection against large hospital bills. “When determining whether to purchase additional base coverage, policyholders should consider healthcare inflation, their family history of medical problems, their current base coverage, and the cost of an additional base(si) cover. A thorough evaluation of these factors can help the policyholder determine if increased base coverage or a super top-up is the best alternative,” says Ramamurthy.

FAQs

1. What should policyholders check before renewing health insurance?

Review the sum insured, premium, exclusions, waiting periods, deductibles, co-payment clauses, and hospital network. Also assess whether the cover still matches current medical needs and rising treatment costs.

2. Which health insurance riders or add-ons should be retained at renewal?

Keep benefits that address genuine risks, such as restoration cover, critical illness, personal accident, or maternity cover where relevant. Drop add-ons that are unlikely to be used or duplicate employer-provided benefits.

3. When should a policyholder consider porting or buying a super top-up plan?

Porting may be considered if service, claims experience, network hospitals, or policy features are unsatisfactory. A super top-up can suit those with a reasonable base cover who need protection against high hospitalisation bills.