Life is hectic, and you can forget about some of the crucial dates in your life- such as the renewal of your health insurance.However, a lapsed health insurance policy will leave you without any cover at the right time, when you most require it, in case of a medical emergency. The good news? Lapse does not necessarily imply the termination of your policy.By taking the right steps, you can regain your coverage, protect your benefits, and regain the peace of mind that you previously had.
What Does Policy Lapse Mean?
A health insurance policy lapse occurs when your insurer terminates your coverage because the premium was not paid by the due date or even within the grace period provided. Simply put, without a renewed policy, you will not be covered by active health insurance anymore.This implies that you are not allowed to make claims, get cashless treatment, or any other benefits that the policy used to give.
A lapse is not the same as a temporary delay in payment. Most insurers give a grace period, usually 15 to 30 days, to make the payment after the premium due date. If you still fail to pay within this window, the policy officially lapses.
A lapsed policy might have an impact on your financial security and long-term benefits.Fortunately, in most instances, the insurers will permit you to revive or reinstate the policy by completing some steps.
Common Reasons for Lapse in Health Insurance
Health insurance lapse may occur due to a number of factors, most of which are preventable.Knowing these will aid in avoiding future lapses.
1. Missed Premium Payment
The most prevalent cause is the mere forgetting of making the premium payment on time.The missed payment may occur due to busy schedules, insufficient or absent reminders, or the insurer losing contact.
2. Incorrect or Changed Contact Details
In case of any change of your phone number, email, or address, but the insurers are not informed, they might miss sending renewal notices and reminders.
3. Financial Constraints
On certain occasions, the policyholder might postpone the payment on account of temporary financial problems, and this means that he or she not only misses the due date but also the grace period.
4. Assumption That Auto-Debit Will Work
A large number of individuals use auto-pay facilities using bank accounts or credit cards.In case of a lack of funds in the bank account or the card expires, the payment can be rejected, leading to an unintentional lapse.
5. Lack of Awareness About Grace Period Rules
There are those policyholders who believe that the policy will be in effect long after the due date.The policy is, however, terminated upon the expiry of the grace period.
6. Miscommunication with Agents or Insurer
In exceptional events, the misunderstanding or delayed follow-ups with the agents can lead to missed payment schedules.
Regardless of the cause, the positive news is that insurers, such as ManipalCigna, are offering options that can bring back coverage depending on how the policy is.
Steps to Take When Your Policy Has Lapsed
In case your health insurance has expired, do not panic.Rather, you can use the following steps to revive your policy as soon as possible.
1. Check Your Policy Status Immediately
Whenever you tend to suspect that your policy has lapsed, confirm it by:
- The insurer's website or mobile app
- Customer care helpline
- Your policy agent or distributor
- Insurance notifications via email.
However, in case the policy is still within the grace period, reinstatement may be possible without further formalities.
2. Understand the Terms of Revival
Each insurer has different rules for reinstating a lapsed policy. Typically, you need to:
- Pay the overdue premium
- Submit a revival or reinstatement request
- Provide updated medical details in some cases
If the policy has been lapsed for too long, the insurer may ask for fresh medical tests to assess your health.
3. Make the Payment for Revival
Most insurers charge a late fee or interest for delayed payments. Clearing the pending premium is usually the most important step toward reinstatement.
4. Provide Medical Information If Required
If your policy has remained inactive for a long time, the insurer may require:
- A medical questionnaire
- Diagnostic test results
- A medical examination at designated centres
This is done to reassess the risk before restoring your policy.
5. Wait for Confirmation From the Insurer
After submitting all required documents and payments, the insurer reviews your request and will notify you once your policy has been successfully reinstated.
6. Consider Buying a New Policy If Revival Isn’t Possible
If the gap in coverage is too long or if the insurer declines your revival request following medical checks, you may need to purchase a fresh health insurance policy. In such cases, starting early helps you minimise exclusions and waiting periods.
Renewal Grace Period and Reinstatement
The grace period is a brief allowance that the insurers may give the policyholders after the due date of the premium to enable them to renew their policies without the loss of benefits.This is normally 15-30 days, based on the policy conditions.
Key Points About the Grace Period:
- Your coverage may not remain fully active during the grace period.
- Claims arising during this period may not be payable.
- You can renew the policy without medical tests in most cases.
- You will retain benefits such as waiting periods, No Claim Bonus (NCB), and continuity.
What Is Reinstatement?
Reinstatement refers to the process of reinstating a lapsed policy. It may require:
- Completing a reinstatement form.
- Paying up the unpaid premiums.
- Undergoing medical tests (if required)
Reinstatement can only be made most of the time within a given time span- after that, you might need to purchase another policy.
How Lapsed Policy Affects Your Coverage and Benefits
Allowing your policy to lapse can result in several consequences that may impact you financially as well as medically.
1. Loss of Coverage
After the policy expires, you are unable to claim or use cashless facilities.Any health emergency occurring during this time is subject to out-of-pocket payments.
2. Loss of No Claim Bonus (NCB)
With each claim-free year, NCB increases the sum insured amounts.In case your policy lapsed after the grace period, any NCB that you had accumulated is lost.
3. Reset of Waiting Periods
Other benefits, like pre-existing diseases coverage, maternity, or particular treatment benefits, will require waiting periods.These periods begin anew in case you purchase a new policy after the lapse.
4. Impact on Premiums
A reinstated policy may sometimes have:
- Higher premiums
- Revised policy terms
- Added medical exclusions
This depends on your health condition at the time of revival.
5. Possibility of Denied Revival
If your health has changed significantly during the lapse, the insurer may deny reinstatement and ask you to apply for a new policy.
6. Break in Continuity for Tax Benefits
Section 80D tax benefits apply only if your policy is active. A lapse means you cannot claim deductions for that period.
Preventing Future Policy Lapses
Taking a few proactive measures can ensure you never face a policy lapse again.
1. Use Auto-Debit and Reminders
Register for:
- Auto-debit via bank
- Standing instructions
- UPI mandates
- SMS/email alerts
These prevent accidental misses.
2. Update Contact Information Regularly
Whenever you change your email, phone number, or address, inform the insurer immediately.
3. Pay Premiums Before the Due Date
Avoid waiting until the last day. Make it a habit to renew at least 10–15 days in advance.
4. Choose Long-Term Policies
Opting for 2-year or 3-year policies reduces the frequency of renewals and decreases the chance of missing payments.
5. Monitor Bank Accounts Linked to Auto-Debit
Ensure your bank account has sufficient funds on renewal dates.
6. Keep a Dedicated Insurance Folder
Maintain digital or physical records of:
- Policy documents
- Renewal dates
- Payment receipts
This makes tracking easier.
7. Speak to Your Insurer Early
If you face financial challenges, some insurers may offer flexible payment options or solutions depending on the situation.
Conclusion
One of the major risks that you face by lapsing a health insurance policy is the exposure to huge financial risks, particularly when faced with an emergency.But you can have the situation rectified by taking fast action.Knowing the grace period, the correct steps to take to be revived, and being proactive in regard to renewing in the future will help you have constant and continuous coverage.
Health insurance is a long-term investment in your health.By maintaining it active, you are guaranteed to have access to all the benefits, including the cashless treatment, NCB, the continuity of waiting periods, and peace of mind.With some caution and planning, you will be able to prevent lapses and protect your health and money with ease.
FAQs
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Can I renew a lapsed health insurance policy?
Yes, most insurers allow renewal during the grace period. After that, you may still revive the policy by paying overdue premiums and meeting medical requirements. If the lapse is too long, you may need to buy a new policy.
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What happens after the grace period expires?
Once the grace period ends, the policy officially lapses. You lose coverage, NCB, continuity benefits, and the insurer may require medical tests for reinstatement. Claims during this period will not be honoured.
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Do I lose accumulated benefits after a lapse?
If your policy remains lapsed beyond the grace period, you lose benefits such as No Claim Bonus and continuity of waiting periods. These do not carry forward if you buy a new policy.
