Having health insurance provides a lot of advantages. It gives you peace of mind, offers you an affordable solution to excessive health expenses, and makes sure that you do not have to compromise on your health because of a lack of money. A health insurance plan offers you financial protection against unforeseen circumstances and medical emergencies, however, you need to keep in mind that health insurance is a yearly contract that needs to be renewed on time so that you can continue enjoying the coverage benefits.
At the time of renewal, it is best to review your health insurance plan because a lot can change in one year. Your health might have deteriorated, you might wish to purchase an add-on cover for extra protection, you may decide to add someone to your plan as a floater, and other such scenarios. Health insurance renewal is the time when you can bring all these changes to your policy and thus, reviewing it is important.
Let us look at most of the common reasons to review health insurance plans annually.
1. Healthcare costs are increasing by the day, can you handle a hit?
Over the past few years, the healthcare industry has witnessed some major advancements, and these innovations have also led to a sharp increase in healthcare costs. That's not all, in 2020 India recorded medical inflation of 14%, the highest in Asia1, which has made affording good-quality treatment rather challenging.
Your hard-earned savings may take a serious hit if you need to receive treatment and have to pay the expensive medical costs out of your pocket. In order to avoid that, you should review your plan annually and determine whether your health insurance can keep up with the rising healthcare expenses or needs to be updated.
2. There is constant innovation in insurance products, make the most of it
India has a large insurance market, and insurance providers often update their existing healthcare products with new add-ons and covers to outperform their competitors. Therefore, with a little bit of research and investment, you can enjoy all these benefits at the same or a slightly higher premium rate.
3. Consider the changes in your lifestyle
Desk jobs replacing physical labour and packaged, preserved foods replacing fresh and organic alternatives have already taken a toll on our health. Additional factors like stress levels, long working hours, irregular sleep patterns, etc., are worsening our lifestyle and giving rise to serious health problems like high blood pressure, diabetes, obesity, etc., that can further lead to cardiovascular diseases. In order to be sure that your existing policy can support your changing lifestyle, reviewing it at least once a year is important.
4. Is your coverage enough? Do you need a higher sum insured?
As we discussed above, the cost of healthcare is increasing day by day. The treatment that cost INR 1 lakh a few years back, may now cost you two to three times. You therefore must review your health insurance policy each year and increase the sum insured if you feel you need higher coverage.
5. Make way for major life events
Major events in life like job switches, marriage or childbirth impact your life to a great deal and thus, reviewing your policy following the event is crucial. For example, if you were unmarried at the time of buying the policy and then you get married, the need to cover your spouse under the same policy may arise. However, this can only be done during the time of policy renewal.
6. Be sure to avail maximum tax benefits
Health insurance plans not only cover your healthcare bills but also provides financial assistance in the form of tax benefits. Under Section 80D of the Income Tax Act, the premium paid for a policy qualifies for a tax deduction worth up to INR 25,000. If you are paying the premium for your parents who are above 60 years, or if you/ your spouse has turned 60, you can save up to INR 1 lakh as tax deductions.
In order to make sure you always have adequate coverage against unforeseen situations, health insurance plans must be reviewed and renewed annually.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.