What Should You Do When Your Health Insurance Lapses?

Posted on: Apr 25, 2022 | | Written by:

What Should You Do When Your Health Insurance Lapses?

No matter how healthy and fit you are, life is uncertain. You never know when you might fall sick or need to rush to the hospital. You might get diagnosed with an ailment that might require you to undergo a surgery. And this can be overwhelming for you as well as your loved ones. However, if you have enough health insurance cover,you will at least know that your finances will be protected. But what if you forget to renew your health insurance policy?Medical bills can eat into your savingseven before you realise it. Therefore, find out more about policy lapses and what your options are when you realise that your policy has lapsed.

What does policy lapse mean?

Every health insurance policy has a specific period. After this time frame, you need to renew the policy by paying the premium for the next period. If you forget to renew within the due date, the insurer provides a grace period of 15-30 days, and during this period, you can still avail the benefits of the policy. But if you miss the grace period, your policy will lapse and will be considered null and avoid. Unfortunately, if you meet with a fatal accident or suffer from a serious ailment when your policy has lapsed, all the medical expenses will need to be borne by you.

What if your health insurance policy has lapsed?

• Once your health insurancepolicy lapses, you are no longer covered by the policy. It means you can’t avail all the benefits mentioned in the policy agreement. So, you need to meet all the medical expenses with your savings, unless you have a secondary health plan as a backup.

• Reviving a policy after it lapses can mean you losing your accumulated No Claim Bonus (NCB). And all those years of not making a claim will go down the drain as you won’t get the massive discounts NCB gets you.

• Lastly, policy lapse will also mean that you will need to start the waiting period all over again. Every policy has a waiting period for certain diseases. And let’s say you waited for one and half years of the two-year waiting period.A policy lapse will kickstart the cycle of two years all over again.

Ways to avoid the lapse of health insurance policy

The last date to renew a health insurancepolicy is not necessarily the date when the next premium is due. Most policies offer a grace period. So, the policyholder has time till the end of the grace period to keep the policy going despite missing the premium deadline. If you are not too sure that you will remember when to renew the policy, simply set your bank settings for auto-renewal of the policy. It means the money will be deducted automatically from your bank account. You can also buy a multi-year plan. Supposedly, if you buy a policy for three years, the renewal will be needed only after three years, instead of you renewing it every year.

What to do if a health insurance policy lapses?

1. Policy Revival:

On discovering that you have not renewed the policy and missed the grace period as well, you can approach the insurance company and request policy revival. If they find the reason behind the inaction as a genuine cause as opposed to pure negligence, they may take a more lenient approach. The insurer has the right to reject your request as well because the application will be judged based on your — current health conditions, ability to pay the premium, intent to do so, settlement of dues, and fines — among other parameters. Most insurers have a revival window of six months from the date of policy lapse. They will ascertain that there is no foul play involved. A change in health conditions or financial stability may lead to increased premium and customised terms and conditions.

2. New Policy enrolment:

You can always apply for a new policy. When compared to the lapsed policy’s premium and penalties for its lapse, the revival of the policy will become a more expensive affair than buying a new one altogether. When buying a new insurance product, you can get better benefits at a lesser price from a different insurer. However, figure out what will happen to the accrued benefits like NCB of the lapsed policy.

Conclusion

To wrap up, a health insurance policy is of no use if it doesn’t come to your aid when you need it? So, when you get notifications from your health insurance provider via calls and emails that your policy renewal date is nearby, don’t ignore the messages. Take timely action to stay covered by your policy benefits.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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