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Cooling-off Period in Health Insurance Policy and It's Importance
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What Do You Understand by the Cooling-Off Period in Health Insurance?

Parvathi Menon works as a primary school teacher. She was part of the COVID-19 safety team formed by her school to help the kids and parents understand the pandemic when they visit the school after lockdown. Within a week, she was diagnosed with a COVID-19 infection and had to be hospitalized for a few weeks. Unfortunately, she did not have any health insurance policy that made her pay for the treatment from her savings. After her recovery, she approached a few insurance companies to buy a health plan. She was told about the cooling-off period of 90 days, during which she is not eligible to purchase new health policies. Left with no other choice, she waited for the cooling-off period to end and then bought a health insurance policy to protect her from future health crises.

What is the Cooling-off Period? 

The cooling period meaning in insurance is the time during which a COVID-19 affected person will not be able to purchase a new health insurance policy after testing negative for the infection. This period could last between a couple of days to several months.

If you’ve just been cured of coronavirus and are considering purchasing health insurance on your own, you might find it difficult to purchase it immediately. Private health insurance firms with the highest ratings, such as Niva Bupa, Care Health Insurance, ICICI Lombard, ManipalCigna, and HDFC Ergo General Insurance, are quoting the term called “Cooling-Off” period that spans two weeks to three months for those who were infected by a coronavirus.

What is the Reason Behind a Cooling-Off Period in Health Insurance?

If you are wondering why such a cooling-off period is being introduced, here are some of the important reasons:

  • There is no evidence of the long-term impact of COVID-19 on the health of patients. However, since there have been many cases of cardiovascular, pulmonary, and heart-related problems found in individuals affected with COVID-19, there is a complication found in the underwriting procedures for new policies.
  • The Cooling-off period provides an appropriate time frame for the development of any other unknown complications arising from the COVID-19 infection that could influence the issue of an insurance policy.
  • This interval is vital for ensuring that the condition of the customer is assessed fairly and in a precise manner. 

Therefore, the Cooling-off time period ensures that whatever condition the individual faces isn’t a pre-existing condition. As a result, they won’t face difficulties having their claims settled in the near future due to any of these.

How does the Cooling-off Period Work? 

A cooling-off time period allows insurance companies ample time to assess the health of the person precisely prior to them purchasing the health insurance policy.

It is possible for you to be asked to submit a COVID-19 negative report and undergo a physical medical examination during this time. In addition, certain insurance companies may also require that you disclose any health problems that you have experienced in the last six months up to one year and also furnish relevant medical documentation.

In the end, based on the circumstances, the underwriters at the insurance company will decide on whether to issue a new policy immediately or postpone it until the end of the cooling-off period. 

Cooling-Off Period of Different Companies

While some insurance firms do not follow such a concept, there are others that have implemented the cooling-off period. Let’s take a look at the period of the cool-off set by each insurance company:

  • ICICI Lombard: 15 days.
  • ManipalCigna: 90 days.
  • HDFC Ergo General Insurance: The cooling-off period is 45 days beginning on the date of diagnosis.
  • Max Bupa Health Insurance: The cooling-off period is three months, starting from the date of negative testing.
  • Care Health Insurance: The cooling-off time is for three months.


Difference between Cooling-off Period & Waiting Period 

In health insurance, there is another term called the waiting period, which people confuse with the cooling-off period. Though both sound very similar, they are vastly different from each other.

  • Cooling Period: It’s a short amount of time after you’ve recovered from an illness such as COVID-19, during which you might not be able to purchase a new insurance policy for coronavirus. The time period could be between two weeks and three months.
  • Waiting Period: This is the time period that starts following the purchase of a new insurance plan, wherein you must wait for a specific amount of time until you are eligible to file claim requests or utilize the benefits offered by the health insurance. The waiting time, as well as its conditions, can be different depending on your personal profile, medical history as well as insurer.


How to Prepare Yourself? 

You should get an insurance policy exclusively for health before you contract COVID-19 so that you are able to benefit from the policy benefits without further delay. Also, make sure you understand what’s covered by your insurance policy (for instance, COVID-19 treatment or hospitalization, as well as the extent of claim) in order to ensure that you are ready, In case of any adverse event.

Similarly, if you’ve been able to recover from illness, make sure to provide any information requested by your insurer, such as previous health conditions or medical records, to ascertain that you don’t have any issues that may eventually result in your claim being denied. Finally, remember to renew your health insurance at the appropriate time to avoid penalties or gaps in your insurance coverage. This could also leave you without any coverage if not renewed on time.

The Conclusion

Today, because of the COVID-19 virus, a health insurance policy has transformed itself into a must-have accessory. It protects you from significant financial losses should there be a medical emergency. Hence, if you’re in good health and have not yet suffered from the virus, make sure you obtain a health insurance policy whenever you can to ensure that you are protected faster. If you do get affected, you can also be confident of your health insurance to protect you from any expenses related to the recovery and treatments.


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