1. Home
2. Blogs

Handy Tips to Help You Prepare for Health Insurance Premium Payments

• 
• 
• 
• 0
• 0

Published on October 12, 2021. EST READ TIME: 3 minutes

No matter how great your memory usually is, it is only human to forget things at times. However, forgetting to pay something like your medical insurance premium on time can cost you heavily. That is because you will lose all your policy benefits. Also, remembering to pay the premium at the last moment means you need to re-plan your whole annual budget as premiums for all family members can be as high as Rs 50,000. In case you don’t have that kind of money handy, you will either need to borrow the amount or let go of the plan. To ensure that you don’t have to deal with such situations, you can simply plan better. So, let’s learn about planning the premium payment in advance.

Importance of paying a premium on time

To put it simply, when you pay your medical insurance premium on time, you continue to enjoy the coverage that the policy assures. So, in case of any medical emergency that may require hospitalisation, you will remain protected financially by the insurance policy. Also, because you have a policy, you can avail the best medical facilities in your vicinity.

Drawback of not paying the premium on time

Be aware of these drawbacks, so that you become more careful about paying premiums punctually.

• If you do not pay the premium by the due date, the insurer will extend to you a grace period. Now, this can be 15 or 30 days, depending on the policy wording. After the grace period, the policy will lapse. For example, say your due date for renewal is October 31 and your insurer has a grace period of a month, but you don’t pay the premium by November 30.This means, you will have no health insurance in December.

• Once the policy lapses, you will have to buy a new one. This could mean a health inspection, documentation and verification, and more importantly, a revised policy premium, which can be more than what you were paying.

• If you don’t make any claims, your insurer may reward you with discounts or additional benefits. So, if you had a claim-free year, and your policy lapses, you will miss out on all the benefits you could have received at the time of renewal.

• As per The Insurance Regulatory and Development Authority of India guidelines, health plans are renewable for life, only if they are renewed without a break. Now, if you are a senior citizen who missed renewing the plan, the insurer reserves the right to not offer you any plan because of your age and pre-existing diseases. And you can imagine what it could mean to have no insurance as a senior citizen vulnerable to many critical illnesses.

• Every policy comes with a waiting period on pre-existing diseases. Now, let’s say, your waiting period for an ailment was three years and you forgot to renew the policy in the third year. Now, when you get a new policy, you would have to wait for another 2-3 years.

• Lastly, you won’t get any tax rebate under Section 80D of the Income Tax Act, if you don’t renew or buy a new policy in that financial year. You may have quoted the premium in your investment declaration to the employer at the beginning of the financial year, and if you don’t pay the premium, a sizeable amount will be added to your taxable income.

Tips for planning the premium payment in advance

Remember these tips so that you are always covered by insurance.

Purchase a health insurance plan according to your budget :

While wide coverage is important, it is also crucial to keep your earnings and savings in mind. If you think you will find it hard to pay a big medical insurance premium every year, have a word with the insurer and find out how add-on covers or top-up plans can help instead. There are ways to bring down the premium like a deductible clause and you should explore the available options. However, if your income rises, you can look to upgrade your coverage at the time of the next renewal.

Maintain an emergency fund :

This fund will get you out of trouble when needed. Use the emergency fund to pay the premium even if you remember it during the grace period.

Put up advanced reminders :

While the insurer will mail and message you about the renewal of medical insurance premium, you can set up multiple reminders too. There are several apps that can do it for you. You can also opt for the auto-debit option by linking your policy with your bank account.

Conclusion :

All in all, health insurance can protect your finances during medical emergencies and its renewal shouldn’t be taken casually. The above-mentioned ways can help you streamline the process and you can continue to stay covered by the health plan.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

RELATED ARTICLES

Make Health Insurance a Crucial Part of Your Financial Planning

Tips to Buy the Best Health Insurance Policy

Tips to Reduce the Health Insurance Cost While Enjoying its Full Benefits

---

• 
• 
• 
•