Why is "policy renewal" important in health insurance?

The importance of policy renewal in health insurance primarily lies in its function of extending the coverage duration of an insurance policy, often accompanied by a reassessment of the risks associated with the policyholder. When a health insurance policy is renewed, insurers may evaluate the current health status of the insured, changes in the healthcare market, and other factors that could influence the terms of the policy.

Renewal provides an opportunity for both insurers and policyholders to review coverage needs and adjust the terms of the policy as necessary. This reassessment can affect premium rates, benefit limits, and exclusions based on the individual's current health status or lifestyle changes. As such, regular renewal is essential for maintaining relevant and adequate coverage that meets evolving needs over time.