If you have a senior citizen health insurance policy, it is feasible to cancel the policy midway through the policy year.

Here it is important to note that a health insurance company can also cancel the insurance policy by sending 30 days’ notice at the insured’s last registered address. In such a case, the insurer shall refund the premium to the policyholder on a pro-rata basis for the unexpired tenure.

The policyholder can cancel the policy at any time, and in such events, it becomes necessary for a health insurance company to refund the premium, provided no claim has been during the policy tenure up to the date of cancellation.

In most of the cases, insurers charge the following premium rates and refund the remaining=

Period of riskRate of premium to be charged by the insurer
Up to 1 month1/4th of the annual premium rate
Above one month and up to 3 months1/2 of the annual premium rate
Above three months and up to 6 months3/4th of the annual premium rate
Above six monthsFull annual premium rate

The health insurance company can cancel the senior citizen health insurance policy on the grounds of moral hazards like malicious suppression of material facts, intentional misrepresentation of facts, filing a fraudulent claim.

However, it is important to note that the health insurance company shall remain liable for any claim which arises before the date of cancellation. It means, if a claim is received before the cancellation date, the health insurance company has to settle the claim if it finds it genuine.

In case, the policyholder is not agreed on the amount of premium that has been refunded by the insurer; the matter will be handled by an arbitrator who will be appointed by both the parties involved in the dispute.

It is also feasible to cancel the senior citizen insurance policy during the freelook period, i.e., 15 days from receiving the policy kit for the first time when you buy the policy. In case you cancel the policy during free look period, the insurer will only deduct service tax, medical checkup expenses, incurred if any.

Read More: What should you consider while buying health insurance for senior citizens?

Case: 1

40- year old Ravish Sharma was living in Delhi with his wife and father, who was 62-year-old. Considering his age and ailments associated with it, Ravish decided to buy a senior citizen health insurance policy for his father. After reviewing all the available policy options, Ravish decided to purchase senior citizen health insurance policy offered by Insurer X.

Insurer X asked for health details of Ravish’s father and after carefully analysing all the information, issued the policy. After two months of buying the senior citizen health insurance policy, Ravish felt that the policy had some hidden clauses and the Insurer Z was offering more comprehensive senior citizen health insurance plan. Ravish decided to cancel the senior citizen health insurance policy bought from Insure X.

Ravish sent a cancellation notice to Insurer X at its registered address who confirmed the receipt of the notice upon receiving.

As it was the second month in which Ravish went for policy cancellation, the insurer charged 1/2 of the annual premium rate and refunded the remaining. Here, the premium was Rs 35,000 for one year. The insurer charged Rs 17,500 and refunded the remaining Rs 17,500 to Ravish.

Read More: Should You Include Dependent Parents of Employees in Group Health Insurance?

Case: 2

Though Manoj Singh had bought a senior citizen health insurance policy for its father after careful investigation; now he wanted to cancel the policy when his employer agreed to cover his father under corporate health insurance.

His employer asked for details of his father and agreed to cover him from the next financial year. However, before the employer could cover his father under a corporate health insurance policy, his father got a cardiac arrest. Manoj immediately rushed his father to a good hospital where the efforts of doctors saved his life.

In this case, Manoj approached the senior citizen health insurance company of his father who asked for certain documents and later settled the claim.

Now in this situation, Manoj was not allowed to cancel his father’s senior citizen health insurance policy in midway as he had got a claim settled under the policy.

The situation would have been different if Manoj had approached the health insurance company before the claim settlement.

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