How to Cancel Your Health Insurance Policy?

Did you know that medical inflation in India is among the highest in the world? It is around 14%, while that in other countries is 10%. The reason for this high figure is technological advancements in the field of medicine, an increase in demand for healthcare services, and an increase in hospital costs. Suppose a surgery that costs ₹2 lakh today will cost around ₹4 lakh in the next 5 years. Not only this, but the cost of doctor consultations and medicines is also rising.

What do you think you should do in this world of rising inflation? The answer is: get a health insurance plan immediately. If you already have a health insurance policy and wish to discontinue it, this article outlines the steps to cancel your health insurance policy. In India, reputable insurers like Bajaj General Insurance provide a clear and transparent process of cancelling your policy that aligns with the regulatory guidelines from IRDAI.

However, let us first understand the reasons behind this decision and the points you need to keep in mind before taking this important decision of cancelling your health insurance policy.

Understanding the Reasons Why People Cancel Their Health Insurance Policy

All of us know the importance of a health insurance policy. It helps cover medical expenses in case of hospitalisation or on diagnosis of certain medical conditions. However, some people still opt for cancellation of their health insurance policy, which may not always be the right decision. Nevertheless, let us understand the reasons why policyholders may cancel their health insurance policy:

• High premium costs

Sometimes, people may find premiums are becoming too hard on the wallet, especially if they increase with age or after claims. In such circumstances, they may cancel their policy but do not realise that medical bills may hit them even harder.

• Job switch

If an individual moves to a new job and the new employer provides health insurance, he may cancel his existing health insurance policy. But it is important to understand that job-based insurance will end after you leave the company. Also, job-based insurance may not include riders and additional benefits.

• Buying a better plan elsewhere

People may discover some other plan with a different insurer who may offer better features, lower premiums, or add-ons and may cancel their existing health insurance premiums.

• Dissatisfaction with the service provided

Sometimes, an individual may be disappointed with the existing service of their current insurer. Perhaps their claim got rejected or customer support was inadequate. This dissatisfaction with the service may force them to cancel their policy.

• Lack of awareness

Young individuals may feel they are healthy now, and there is no need to continue their policy for the next few years. As a result, they may cancel their existing policy without thinking about what they may have to go through if unexpected medical expenses arise.

Also Read: Reasons Why Health Insurance Premiums Change With Increasing Age

Step-by-Step Process: How to Cancel Your Health Insurance Policy

Follow this step-by-step process to cancel your health insurance policy:

1. Check the Free-Look Period

A free-look period in health insurance policies (around 15-30 days) starts from the date when you receive the policy contract. During this period, you can cancel your policy if you are not satisfied with the terms or conditions of the policy. You will be provided a full refund after deducting a minimal amount towards administrative costs if you have not made any claim during this period. Read the cancellation terms in the policy document thoroughly before cancellation.

2. Contact Your Insurance Company

After going through the policy wording, contact customer care or email the insurer and inform them you want to cancel your policy. In your email, mention the reason for cancellation, your policy number, and your personal details.

3. Fill Out the Cancellation Form

A cancellation form may be provided by your insurer that you will need to fill in and submit. You may also need to attach a few details like your policy number, ID proof, and bank account information (for refunds).

4. Clear Pending Documents

Sometimes the insurer may ask for the original policy documents, ID proof, and bank documents to process the refund. Submit the necessary documents. Also, if there are any pending dues, the amount will be deducted from the refund.

5. Wait for Refund (if applicable)

The amount eligible for refund will be processed after deductions. For example, an insurance company may deduct charges for the days you were covered.

6. Get Written Confirmation

After the policy has been cancelled, ask for an official cancellation confirmation. It will help you avoid future confusion.

Also Read: What is the Difference Between an HMO, EPO, and PPO?

Things to Keep in Mind Before Cancelling Your Health Insurance Policy

Before you cancel your health insurance plan, keep these points in mind:

• Future Medical Costs

Once you cancel your policy, remember that you are not covered for any medical bills or hospitalisation costs and may have to shell out a huge amount if a medical emergency strikes.

• Waiting Periods in New Policies

If you decide to cancel the existing policy and purchase a new one, it will come with a waiting period for pre-existing diseases or conditions like maternity or some surgeries. So, you will remain uncovered for a certain period of time.

• Tax Benefits

Health insurance premiums provide tax deductions under Section 80D. If you cancel the policy, you will not be able to claim the refund.

• Coverage Gaps

Do not cancel your old policy without purchasing a new one. Else, you may leave yourself and your family members without insurance protection.

• Refund Rules

You may not get the entire premium amount back as refund, and the calculation will be based on the insurer’s terms, how long the policy was active, and whether any claims were made.

In short, think twice before cancelling. Sometimes tweaking your existing policy is a smarter option than cancelling it completely. You may port your existing policy to a reputable insurer like Bajaj General Insurance for better features and benefits.

If you are bothered about the high cost of premiums, then go for a lower sum insured. Another option is to review your policy and drop unnecessary riders or add-ons to make the plan more affordable. This way, you will stay covered and the premiums will be affordable too.

Conclusion

With an increase in medical costs, having a health insurance policy protects individuals from financial shocks. If you want to cancel your health insurance plan, understand its implications. If high premiums or limited features are bothering you, tweak your plan or port it to another insurer instead of cancelling it completely. Sometimes, adjusting the plan will make it affordable while still keeping that much-needed protection. For affordable health insurance plans with multiple riders, quick claim process, minimal documentation process, and 24x7 support, visit Bajaj General Insurance.

FAQs

1. Can I cancel my health insurance anytime?

Yes, you can cancel your health insurance policy anytime, but the refund amount of your premium will depend on the policy terms and how long you were covered.

2. What happens if I cancel during the free-look period?

If you cancel your policy during the free-look period, your premium will be refunded after deducting a nominal amount if you did not initiate any claim.

3. Will I lose tax benefits if I cancel my policy?

Yes, you won’t be able to claim deductions under Section 80D anymore.

4. Should I cancel if my company gives me health insurance?

Job-based health insurance ends after you leave the job. So, cancelling your health insurance policy may not be the best decision.

5. Is it better to port my policy instead of cancelling?

Yes, portability lets you switch insurers without losing waiting period benefits.

*Standard T&C apply

**Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.