Health insurance companies give a grace period of 15 to 30 days from the due date for depositing the premium.
Sapan Dave of Surat had an old health insurance policy. This time the premium was not paid and the policy lapsed. Not only Sapna, but a large number of people make this kind of mistake. They do not pay the premium on time due to which their insurance cover gets terminated. Due to this mistake they may have to suffer huge losses in future. To avoid such a situation, the due date should be kept in mind. Health insurance companies give a grace period of 15 to 30 days from the due date for depositing the premium. If the premium is not paid in the meanwhile, the insurance policy lapses.
If you renew your health insurance policy on time, you will continue to get continuous coverage despite changes in age and health. Once the waiting period is completed, existing and past diseases will continue to be covered. If the policy gets broken then you will have to complete the waiting period again.
When you do not make any claim in a policy year, the insurance company gives you the benefit of no claim bonus, which can range from 5 to 50 percent annually. With this, your basic insurance cover i.e. sum insured can increase up to 100 percent. If you do not renew the policy on time and the policy lapses, you will lose the benefit of the bonus.
Keep in mind the waiting period
Waiting period is an important aspect in health insurance. In common diseases this period ranges from one to three months. That is, in case of fever etc., you can claim the hospital treatment expenses only after the waiting period is completed. If you have any pre-existing medical condition, there may be a waiting period of two to four years for these to be covered. Once the policy lapses, cover for existing diseases will be available only after a long wait.
Will have to pay higher premium
The risk of falling ill increases with increasing age. If you fail to renew your policy on time, you will have to pay a higher premium when you buy a new policy. After a certain age, insurance companies provide insurance cover only after medical examination. In such a situation, due to age, medical history and lifestyle habits, the insurance company may refuse to provide you cover.
You can avail tax exemption
Your health insurance proves helpful in protecting your health as well as in saving income tax. Under Section 80D of the Income Tax Act, you can avail tax exemption on premium up to Rs 25,000 in a financial year. If parents are senior citizens, they can avail tax benefits on premium up to Rs 50,000. If your health policy stops then you will have to lose this income tax saving also. However, the goal of buying health insurance should not be tax saving. But this must be an important part of your financial planning.
Personal finance expert Balwant Jain says that if you have an old health insurance policy, then always renew it before time. However, insurance companies start sending reminders a month in advance to pay the premium. You should also set a reminder from your end. Never wait for the last date to pay health insurance premium. You should pay this premium one month in advance. Keep increasing the insurance cover as per the needs of the family. If for some reason you miss paying the premium, your health protection will be weakened.
Published – January 13, 2024, 01:18 IST
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