Steps to Cancel Health Insurance Policy in India

Having a health plan is the biggest need of the time. However, like knowing the process of procuring a policy, one should also be aware how to cancel health insurance policy. Let us find out the process in this post.

During medical emergencies, health insurance plans keep the user ahead by taking care of the incurred expenses of the treatment. Though it is imperative to have a health insurance policy, it is also equally important for every policyholder to be aware of all the details of the policy. In this post, we will discuss how an insurance policy can be cancelled and the information about formalities related to pre and post cancellation policies. The first thing, however, is to ensure that you really want to cancel the policy and why.

Evaluate Everything Before Cancelling an Insurance Policy

Wondering, how to cancel health insurance policy? It is possible for an insurance policyholder to cancel his/her policy at any given time during the policy term. Also, it is not required for a policyholder to wait for the completion of the waiting period to cancel an insurance policy.  However, the refund amount received by an insured for a cancelled policy depends on the time when the policy was cancelled.

Though cancelling an insurance policy is not difficult, however, it is important to evaluate and consider many things before taking the step. You should ensure the medical history of the family, about your savings in hand, as well as the number of people who are dependent on you. This is because the huge inflation in the medical industry has made even the basic healthcare treatments too expensive these days. Thus, if you are the sole bread earner in the family, it becomes all the more important to stay covered under a family floater health insurance policy. Thus, considering all such things is very important before cancelling a policy.

Let us discuss some significant points that a policyholder must consider before buying a health insurance plan.

Key points to Consider before Cancelling your Health Insurance Policy

Below are some questions that a policyholder must try to find the answers for before making the policy cancellation decision.

Reason to  cancel health insurance policy – The first important thing is to consider the underlying reason to cancel the insurance policy. This question is also important because the policy cancellation depends on how legitimate your reason is
Consider health insurance portability – If a policyholder is not satisfied with the terms of the policy, not happy with the insurer or the cost of the policy, he/she can always switch plan by means of health insurance portability
Consider your Savings –  Because of inflation in the medical industry, it has made even the basic healthcare treatments too expensive. Thus, you may cancel a health plan only if you have enough savings to deal with any unforeseen medical situation
Any Additional health Policy – If you already have another health plan covering your family, you may consider cancelling one policy. But make sure to have enough coverage for everyone in the family
Dependents  –  Another important thing to consider is the number of dependents you have. If there are minor children, spouse as well as dependent parents who rely on you, consider twice before you cancel insurance policy
Refund – Checking the amount that you may receive after policy cancellation is also important. If you are likely to receives a very small amount, it is better to carry on with the policy till the end of the policy tenure and do not renew the plan. It will get cancelled automatically

However, if you have made up your mind and are sure about cancelling your health plan, below are the details regarding health insurance policy cancellation to guide you better.

Cancelling a Policy During Free Look Period

Free-look period is a time duration of over 15 days (from the policy initiation date) that is allowed with every insurance policy. During this time, the policyholder can plan to cancel the policy and get the entire premium amount refunded.   The free look period allows the insured to ponder upon the policy terms and conditions and to continue or cancel it as per consideration.

Deductions in the Amount Refunded

There may be deductions in the refunded amount such as:

Stamp duty and administrative charges
Expenses that the insurance company has incurred on medical examination
Prorated risk premium for the duration during which the insured stayed covered

Cancelling a Policy After Free Look Period

Sometimes, a policyholder might miss out on cancelling a policy during the 15 days free look period and may want to cancel it after the period is over. In that case, the policyholder may not be entitled to get the 100% compensation of the premium amount by the insurer.

Here, the deductions in the refunded amount includes:

Time  Duration	Deduction
Within 1 month	Policyholder is eligible to receive 75% of the premium paid
Within 3 months	Policyholder is eligible to receive 50% of the premium paid
Within 6 months	Policyholder is eligible to receive 25% of the premium paid
After 6 months	Policyholder may not receive any amount as insurer is not liable to pay anything after 6 months of the policy

 

How to Cancel Health Insurance Policy

Cancelling a health insurance policy can be done in simple steps as follows:

Request for Cancellation – If the policyholder realises that the policy he bought is not fulfilling his exact needs or he/she is not satisfied with the health insurance terms and conditions, the individual can write an application for cancellation of insurance policy with the insurer. Once your request reaches the insurer, you may be asked to fill some forms and documents by the insurer.
Processing of Cancellation – To process the cancellation request, the policyholder would be contacted by the insurer to get further details. The insurer might like to know the reason for cancelling the policy, other documents etc. They might also suggest alternative policy or a solution to your issue. If your reason for policy cancellation is valid, the request will be processed and a refund will be initiated.