Steps to Cancel Health Insurance Policy in India

878

5 min read

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.

What are the documents required to cancel a Health Insurance policy?

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.

  1. 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
  2. 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
  3. 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
  4. 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
  5. 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
  6. 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.

Also Read: What is Health Insurance with OPD Cover?

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.

Read More: Mukhyamantri Amrutum Yojana Eligibility, Coverage, and Benefits

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.

Read More: What is the Free Look Period in Health Insurance Policy?

To Sum Up

It is a hassle-free process to cancel an insurance policy. However, it is very important to consider all aspects as mentioned above before going ahead with the cancellation plan. Insurance is very significant for everyone as it secures the policyholder from any financial turmoil caused due to medical emergencies.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

View this post on Instagram

 

A post shared by paybima (@paybima)

FAQs on Steps to Cancel Health Insurance in India

Is it possible to cancel my insurance policy and get my money back?

Yes, it is possible to cancel your policy after paying the premium during the policy term. The insurer must oblige with your policy cancellation request and refund the remaining balance as per the terms of the policy. You must read the policy document well before purchasing a health plan to understand the terms of cancellation. 

Can I cancel my health insurance anytime I wish?

Though cancelling a policy anytime during the policy period is possible, it is advisable not to cancel the plan without any significant reason. You may also note that the amount refunded depends on policy cancelation time or when the policy was cancelled. 

What is the difference between grace period and free look period?

Free - look period is a time duration during the start of the policy just after buying it, while grace period is the time during the end of the policy-term at the time of policy renewal. Free-look period ranges from 15-30 days, grace period mostly allows 30 days time. The policyholder can cancel a policy under free-look period if they find the terms of the policy unsatisfactory and get the total premium amount returned. Grace period allows policyholders enough time to renew a policy in case the insured miss out on the policy renewal date.    

Will I get a full refund if I cancel my Health Insurance after the free look period?

No, after the free-look period, you cannot get a 100% refund of your policy as you may have to pay a cancellation charge, which differs as per the insurance company. Further, you may receive a refund of the remaining amount accordingly. 

Dec 12, 2022
SHARE THIS ON
Author Bio
Author Image

PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

Related Blogs

Would love to hear from you

Share your candid feedback. Your email address won’t be published, we promise!

All fields are required

Find your suitable insurance plan

Speak to our advisor

Latest Posts

Mahindra Insurance Brokers Limited (A Mahindra Group Company) - Unit-202, A-Wing, 2nd Floor, Amiti Building, Agastya Corporate Park, Kamani Junction, LBS Marg, Kurla West, Mumbai - 400070. Tel: +91 22 66423800

Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).

Insurance is the subject matter of solicitation.

For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.

Copyright © 2024 Mahindra Insurance Brokers. All Right Reserved.

Get A Call Back
Get A Call Back