Factors to be Considered if You Wish to Cancel your Health Insurance Plan
Thanks to the changes introduced by the IRDAI, health insurance plans allow lifelong renewals. This means that once bought, you can enjoy coverage for your entire lifetime without there being any maximum coverage ceasing age. This is very beneficial as you can enjoy comprehensive coverage even in your old age when the requirement of medical attention increases considerably. So, buying a health insurance plan when you are young, for comprehensive coverage, and continuing it non-stop can give you the much needed financial protection when you need it the most.
Despite health plans offering lifelong coverage, many policyholders wish to cancel their health insurance plans. Some of the common reasons for the same include the following –
- Dissatisfaction with the coverage
- Dissatisfaction with the insurance company
- Discovery of a better plan offered by another insurer
- Not continuing the coverage because of good health
- Relocation to another country
How can you cancel your health insurance plan?
There are two types of cancellations that you can opt for –
- Free look cancellation
After buying the policy, the insurer allows you 15 to 30 days as free look period. During this period, if you have second thoughts about the coverage and want to cancel, you can do so. Upon cancellation, you receive the refund of your premium after deducting the following expenses –
- Stamp duty paid while issuing the policy
- Administrative costs of policy issuance
- Risk premium for the number of days that you availed of the coverage before cancellation.
Usually, a little amount of premium is deducted and you get the majority of the amount refunded back if you choose free look cancellation.
- Mid-term cancellation
If you cancel the policy any time after the expiry of the free-look period, it is called mid-term cancellation. On such cancellation, a percentage of the premium is deducted and the remaining premium is refunded back. This percentage depends on the cancellation grid of the insurance company. The later you cancel the plan the higher would be the percentage of premium retained by the insurer.
Under both these cancellation processes, you will have to give intimation to the insurer for cancellation. The policy would be cancelled and you would get a premium refund depending on when you cancel.
Portability – a better alternative
Cancellation of your health insurance policy is never recommended. It makes you lose the health insurance coverage benefits. Moreover, the premium refunded is also restricted if you cancel any time after the free look period. So, if you find a better plan or you are dissatisfied with your current policy and/or insurer, opt for porting.
Porting allows you to switch to a new policy either with the same insurer or with another. To port, you just need to send in a request to your existing insurer at least 45-60 days before the renewal date. You should also inform the new insurer about porting from an existing plan to the new one. Porting is subject to underwriting approval by the new insurer. Once you follow the porting formalities, you can switch to another health insurance plan and also retain the renewal benefits, i.e. the cumulative bonus that you might have availed of and the reduction in the pre-existing waiting period.
Factors to consider when evaluating other plans
When you want to move to another health insurance plan, here are the factors that you should consider –
- The coverage offered by the policy should be better and more inclusive than that offered by your existing policy
- The premium vis-à-vis the coverage should be justified
- The new insurer should have a wider network of cashless hospitals and an easier claim settlement process
Moreover, if you believe that your coverage is insufficient, you can opt for a super top-up policy or an additional health insurance plan to enhance the coverage, besides porting. You can also opt for optional add-ons, if available in your existing plan, to customize the coverage as per your needs.
Whether you port, buy a super top-up or an additional health insurance plan, do not give up on the coverage altogether, unless you relocate to another country. Even if you believe you are healthy, you cannot predict accidents and sudden illnesses. It is, therefore, imperative to be insured under a health insurance plan if you want to avoid the financial strain of a medical emergency.
Things to remember when moving to another policy
If you are switching to a new policy, make sure you port within the given timeline to avoid the period of no coverage between the old policy and the new one. When you port within the given timelines, the new policy starts immediately after the existing one expires ensuring that you enjoy non-stop coverage.
Alternatively, if you are giving up an existing policy altogether to move to a new plan, make sure that the date of coverage of the new plan either coincides or overlaps with the date of expiry of the existing one. For example, if the coverage expiry date of an existing policy is 31st July 2021, the new plan should either start from 1st August 2021 or any time before 31st July 2021 so that you don’t face any day wherein you don’t have health insurance. You never know what you might face when you are uninsured.
Also, if you are porting, follow the porting process to retain the renewal benefits, especially the reduction of the pre-existing waiting period. This would give you a smooth transition wherein you wouldn’t lose the benefits of your existing plan.
The final word
Even if you are cancelling your health insurance plan, replace the plan with another one. Do not go without health insurance given the rising incidence of illnesses and the ever-increasing medical costs. Also, keep the afore-mentioned points in mind when cancelling or porting your health insurance policy to avoid losing out in the process.
To get further insights into cancellation, you can visit SANA.insure and connect with our experts. You can also find suitable health insurance plans offered by leading insurers at our website if you wish to port your existing plan. Our Health Insurance Experts are happy to help you should you need any assistance along the way. Please get in touch with us over WhatsApp chat on 8278271818 or call us on 18002028118 for more information.