What to Do If Your Health Policy Expires?

What happens if you forget to renew your health plan? Even a few days in the hospital is enough to deplete a significant amount of your hard-earned money and savings.  

Therefore, it is crucial to maintain your health plan and ensure punctual health insurance renewal without fail.   

However, if you fail to pay the premium dues on time, then what happens? Here, we will discuss it.  

Meaning of policy lapse 

Every health plan maintains a specific tenure, beyond which you need to renew the plan by clearing the premium dues. In case you forget to maintain the last due date, almost every insurer maintains a stipulated grace period, usually 15 – 30 days. If you pay the premium within this date, your policy will be saved.  

However, if you fail this grace period, your plan will lapse, standing null and void. So, if you face any medical emergency during a policy lapse, you cannot avail of any health insurance coverage benefit from it. You have to pay all the medical dues out of your pocket.  

What happens when your health policy lapses? 

When your health insurance plan lapses, you have to face the following situations: 

1. No coverage: You cease to enjoy any health insurance coverage protection under any circumstance from the plan concerned. In case you require any medical coverage, you need to have a backup option or pay all the dues by yourself. 
2. NCB loss: If you revive a health policy after its lapse, you tend to lose all the accumulated No Claim Bonus benefits. This is indeed a very significant loss, and NCBs result in heavy premium discounts.  
3. Waiting period: Every health plan comes with a specific waiting period for certain ailments. This means that before the elapse of that period, you cannot raise any claim for the expenses incurred for treating it. It varies from insurer to insurer and plan to plan. Once your policy lapses and you revive it afresh, you have to begin the waiting period all over again.   

Methods to avoid health policy lapse 

The last policy renewal date should not necessarily be the upcoming premium due date. Often, plans come with a specific grace period. Therefore, the policyholder has time to renew the plan till the end of the grace period.  

If you are unsure about your memory, it is best to instruct your bank to ensure auto-payment of the premiums by the due date. This way, you will not miss the due dates, and the premium amount will be automatically debited from your designated account.  

If you purchase a multi-year policy, you do not face the troubles of yearly renewal. Once you pay the premium, you can live in peace for 2 or 3 years till the next renewal, as per the chosen plan terms.  

What to do after a health policy lapse? 

In case you fail the due date and even the grace period, you need to follow these steps: 

1. Approach the insurer:  

Once you have discovered that you have missed the grace period even, the first thing you must do is approach your respective insurance provider.  

You can request them for plan revival. If they discover that the reason for non-renewal is a bit too serious than sheer negligence, they may consider your case and offer you the opportunity to revive the policy.  

The insurer may as well reject your application, too, depending on the circumstances and after considering your present health condition, premium paying capability, your intentions regarding plan continuity, settling all the fines and dues, etc.  

Usually, most insurers maintain a revival window of 6 months from the policy lapse date. They will ascertain through investigation that there is no inherent game involved in the scenario. However, the premium may increase during revival depending on the current health status, financial status, etc.  

2. New plan enrollment:  

You can easily apply for a brand-new health policy after a plan lapse. Comparing the premium dues of the lapsed plan and penalties, reviving the old plan often becomes a comparatively pricier affair than purchasing a new one. You can ensure better customisation with the new plan with enhanced coverage benefits and more affordable premiums. You can even change your insurer. However, do not forget about the loss of accrued NCB benefits. This is a significant loss which needs to be avoided under any circumstances through punctual health insurance renewal.