Cooling-off Period In Health Insurance – Importance & How It Works

Buying health insurance is one of the crucial financial decisions you take in your life. Health cover is a way to get financial protection against the possibility of diseases, ailments, and ill health. In 2018, the market size of the health insurance sector in India was approximately 370 billion INR. By 2030, the same is expected to increase to two trillion INR ^[1]. Thus, it is no secret that, based on data, experts are expecting the Indian health insurance market to grow. This means more and more Indians are expected to get health covers, including health insurance renewals. It is ideal for everyone to have health cover, to be able to protect themselves. However, there are some things that may get in the way of you getting a health plan right when you want it. One of these things is the cooling-off period. The cooling-off period is a concept which can bring about delays in a person with a sickness, or recovering from sickness, getting their health insurance. What is the cooling-off period and why should consumers know about it? Let’s find out.

What is the cooling-off period?

In health insurance, the cooling-off period commonly refers to a time period following a sickness you encountered, when the policy provider will not approve your policy application. For example, if you were down with COVID-19, the insurance provider is unlikely to sell you a policy during the time you are sick, or immediately after. The existence of a cooling-off period may differ across insurance providers. Moreover, the cooling-off period may or may not apply to health insurance renewals. It is ideal to check with your insurance provider whether the cooling-off period applies to their policies.

Why is the cooling-off period required?

Imagine that a person has been infected with COVID-19 and is required to undergo a cooling-off period. This allows the person to fully recover before they could get the health insurance policy. This may be especially necessary since, in cases like COVID-19, the infection results in some prolonged health issues that may show up after. Having a cooling-off period allows the insurer to ensure that the person to be insured is completely healthy. This means that the insurer will not have to mark any pre-existing conditions in the policy of the customer. If you have used any online health insurance premium calculators, or know anything about how health plan premiums fluctuate, you may know that pre-existing conditions may drive up the costs of your plan. Thus, having a cooling-off period may be suitable for the policyholder as well.

When to buy health insurance?

Many people tend to wait for a long time before they get themselves a health cover. They avoid facing the fact that sickness could affect anyone, and thus, delay getting insured. However, the right time to buy a health insurance is when one is healthy. In such cases, the chances of you being approved for health insurance tend to be relatively better. You may also get better premium rates and better coverage. To figure out how much you have to pay for your health plan at your age and desired sum assured, you may use a health insurance premium calculator to get estimates. 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.