Categorized | Health Insurance

Reviving Your Lapsed Health Insurance

The Coverage under your Health Insurance Policy will Lapse if you fail to pay the renewal Premium on time. For most health policies, you are required to renew your policy at least 8 days prior to the expiry date but no more than 30 days prior to expiry. Say if your policy is expiring on 31st March, you will need to renew the policy latest by 23rd March and earliest by 2nd March.

If for some reasons you fail to renew as desired on time, you can still revive your health policy as insurance companies allow a Grace Period of 7 days (including working and non-working days) after the expiry of your policy. After 7 days have passed once your policy expires and you haven’t paid your renewal premium your policy is considered lapsed and there is no way out for policy revival. A few insurance companies are more lenient and extend the grace period up to 15 days.

The consequences of a lapse policy are severe and it may prove to be a grave mistake. If your policy coverage lapses because of non-payment of insurance premium timely, you will need to buy a new Mediclaim policy as if you are buying it afresh. If you had earned a no-claim Bonus on your previous health policy, you will not be eligible to earn the benefit on your new healthcare policy.

Besides losing the no-claim bonus there are host of other disadvantages. Health cover policies have a Waiting Period of 2 to 4 years before they provide insurance cover for certain illness and surgery. In case of a policy lapse, for the new policy that you purchase the waiting period will not be adjusted for the waiting period that has already been consummated since you first brought your healthcare policy. Thus it is huge penalty that you pay for not paying your renewal timely.

To avoid such a situation it is advised that you keep adequate reminders so that you do not miss the due date. Besides having a reminder you may even choose to do an automatic ECS so that the premium amount towards your due policy is deducted from your bank account on the due date. Insurance companies do send timely reminder in order to ensure that customers do not miss the renewal date, but despite this a significant percentage of health insurance policy lapsing every year. If you miss the expiry date you still have a grace period within which if you pay the due insurance premium you remain eligible for all the renewal benefits.