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Ensure renewal of health policy for optimum benefits

If you have a health insurance policy, always make sure that it is renewed on time and without fail because any break in the policy could affect your entitlements under the policy.

delhi Updated: Jul 08, 2012 01:05 IST

If you have a health insurance policy, always make sure that it is renewed on time and without fail because any break in the policy could affect your entitlements under the policy.

If you read the terms and conditions governing your policy, you will notice that a number of diseases, health conditions/ treatments are not covered during the first year of the policy.

In other words, it will only be covered in the second year. However, you will be entitled to that coverage in the second year only if your policy is renewed on time. Or else, your policy will be treated new and you will lose out on the benefits that will accrue to you in the second year.

Similarly, health policies normally exclude all pre-existing diseases in the first four years. In fact the conditions governing the policy usually state that you will get coverage of pre-existing disease only upon completion of four years of 'continuous ' insurance cover without any break. So if there is a delay on your part in renewing the policy, then the insurance company will treat it a new policy.

It is for this reason that the Insurance Regulatory and Development Authority's guidelines on the portability of health insurance makes it clear that when a policyholder chooses to change the insurance company or change the health insurance plan, he or she will not lose the advantages gained in respect of pre-existing conditions.

In other words, such credits gained in respect of pre-existing conditions and time-bound exclusions will automatically stand transferred when you switch from one insurer to another or one plan to another. However there is one important condition here - that is, the previous policy should have been maintained without any 'break'.

The regulator also defines 'break' and says that a break in policy occurs when the premium due on a given policy is not paid on or before the premium renewal date or within 30 days thereafter. Which means that you have 30 days of 'grace period' for renewing the policy, to ensure continuity.

Having said that, I must point out that the IRDA website (www.policyholder.gov.in) refers to the grace period for renewing a health insurance policy as 15 days.

I would of course prefer the interpretation more advantageous to the consumer - one month-specified in the guidelines on health insurance portability, but IRDA must clarify this urgently for the benefit of policy holders.

Gurmeet Singh: My aunt (52) had taken a health policy, after getting all the required tests done. She had paid the premium regularly for the last two years. The payment falls due in mid March every year and this year, it just slipped her mind. The company also did not send any premium notice. In April, she remembered and sent the premium - while the branch manager has accepted the cheque for continuation of the old policy, the central office is adamant and want to treat it as a new policy.

Please check the terms and conditions in the policy document and see if there is any reference to the 'grace period' for paying the premium. Or else, refer to the IRDA's definition of 'break in the policy' in its guidelines pertaining to the portability of insurance, which gives you one month for renewal.

On this basis, you can insist on the insurer renewing the policy and not treating it as a new one. If the insurer disagrees, refer the matter to the IRDA.

First Published: Jul 08, 2012 01:03 IST