Health insurance is the most sought after insurance product in the recent times due to the corona virus pandemic. The pandemic has made people realise the importance of health insurance. The corona virus pandemic has resulted in the loss of employment for many people and thereby forcing them to depend on their savings. Hence the importance of health insurance was understood by the general public after the costs associated with the hospitalization in case of corona were very high and people living on savings thought it would be highly difficult if the savings are spent for medical treatment and therefore preferred a health insurance plan.
Mr. Salil has taken a health insurance plan when he was 30 years old including his family for a sum insured of Rs.10Lacs. He had continued the policy for 10 years and at the age of 40, due the rising health care costs he felt the need of higher sum insured. He had two options in front of him, one is to increase the sum insured in the existing health insurance policy and the other is to purchase a new health insurance policy with the required sum insured. The sum insured enhancement in the existing health insurance policy can be done by the payment of extra premium subject to the claims and eligibility decided by the underwriter.
Let us understand the advantages and dis-advantages of increasing the sum insured in the existing policy and purchasing a new health insurance policy.
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Sum Insured Enhancement |
New Health Insurance Policy |
| Premium |
The premium to be paid for the sum insured enhancement might be less than that of the new policy depending on the company and the type of policy chosen. |
The premium to be paid for a New Health insurance policy could be on the higher side with increasing health insurance premium rates. |
| 30 day waiting period |
Initial waiting period also known as 30 day waiting period has to be satisfied by the insured for the enhanced sum insured that has been opted under the existing health insurance plan. This waiting period is however not applicable to the hospitalization in case of accidents. |
The initial waiting period or the 30 days waiting period is applicable to all the new health insurance plans and the insured has to wait for 30 days before claiming for any hospitalization excluding the accident related hospitalization. |
| Specific waiting period |
A specific waiting period ranging from 1 year to 3 years has to be satisfied by the insured before claiming for the enhanced sum insured under the existing health insurance policy. |
The specific waiting period of 1/2/3 years is to be satisfied by the insured before claiming under the new health insurance policy. |
| Pre existing waiting period |
Any condition or illness or disease existing 48 months prior to the policy inception is called as the pre existing illness. The pre existing illness waiting period of 2/3/4 years has to be satisfied for the enhanced sum insured. |
In normal terms any illness existing prior to the inception of a health insurance policy is called as pre existing illness and the waiting period of 2/3/4 years has to be satisfied before claiming under the new health insurance policy. |
| Medical tests |
Depending upon the age and claims history, insurance companies might ask for medical tests in case of sum insured enhancement. |
For a new health insurance policy medical tests might be compulsory depending on the age of the customer. |
| Claims |
At the time of claim one health insurance policy is submitted to the hospital and the same is processed up to the sum insured mentioned in the policy. |
At the time of claim 2 insurance policies are to be submitted and it would be quite difficult if these 2 health insurances are from different insurance companies. In case of cashless approvals had to be taken from both the insurance companies and claim settlement may not be hassle free. |
| Renewability |
Renewing one health insurance policy after the sum insured enhancement would be same as before. |
Renewing two health insurance policies with same or different insurance companies can be a cumbersome process. |
| Portability |
Since only one health insurance policy is there, it would be easy to port the health insurance to another insurance company if required. |
There is a chance that one of the two health insurance policies might not be accepted for the portability by the other insurance company. |
| Availability of same policy |
Health insurance sum insured can be increased in the same policy with the same terms and conditions. |
In case of opting for a new health insurance policy, the existing health insurance might have been discontinued and the new plan would have been released in the market with different terms and conditions. |
So, overall it would be easy and convenient for the customer to go for Enhancement of the Sum Insured in the existing health insurance policy rather than purchasing a new health insurance policy.
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