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What to do if health insurance policy renewal date is missed?

When you miss a renewal of a health insurance policy, it can backfire at the most critical times, and you will be forced to spend from your pocket.

April 17, 2017 / 04:03 PM IST

Naval Goel

Busy schedules, attending to emergency needs and several other reasons can stop you from renewing your policy on time. We often tend to forget that policy renewal is as important as buying a policy and filing for claims. Only a timely renewal can keep the health insurance coverage functioning.

When you miss a renewal of a health insurance policy, it can backfire at the most critical times, and you will be forced to spend from your pocket. If you fail to pay the health insurance renewal premium on time, you will not be eligible to enjoy the coverage provided to you by the policy.

If you wish to continue the existing coverage of a health insurance policy, the renewal premium should be paid before the due date.

Grace Period


Consistent payment within the stipulated time can keep you on the safe side. However, if you had missed the renewal date, you can make use of the grace period. Individual insurance companies provide an extension of seven days to renew your policy. Some companies offer an extension of fifteen days.

The grace period also includes the non-working days. If the payment is not made even after the grace period, the policy gets lapsed.

The Consequences of a Health Insurance Policy Lapse

If your negligence causes a policy lapse, you will have to buy a new policy. It will be treated as a new policy, and you will not be entitled to any of the bonus offers that were a part of your lapsed policy. Your existing policy will be taken back, and the coverage will start from scratch.

You will have to undergo a fresh waiting period as the one that was a part of your previous policy will not be considered. The waiting period can range anywhere from two to four years. If the policy has lapsed, the penalty you would pay is huge.

Losses that you will incur due to a health insurance policy lapse

Apart from the trouble, you will have to face for submitting documents, undergoing medical tests and getting approval, you will have to face the following consequences.

a. No access to no claim bonus

If you held on to the lapsed health insurance policy for longer periods of time, you would have accumulated no claims bonus. This gift will result in the increase of the total sum assured. If the policy lapses, you will lose the entireno claims bonus that would have been accumulated.

b. Cover for pre-existing disease

After the purchase of policy, the policyholder has to wait for two to four years to avail a cover for the pre-existing illnesses. In the case of a policy lapse, when you buy a new policy, the same waiting period will count to be eligible for coverage on pre-existing diseases.

c. Constraints on waiting period

In a health insurance policy, after a designated waiting period, the policyholder can avail certain benefits under the plan. In the case of a policy lapse, the policyholder has to serve the waiting period all over again after purchasing a new policy.

If an emergency arises during the waiting period of the new policy, the policyholder has to spend from his pockets and forego the benefits.

d. Loss of Additional Bonus

For every claim free year, an additional bonus of 10 % is added to the coverage amount. After four continuous claim free renewals, the policyholder will be entitled to a free medical checkup that is worth 1% of the total sum insured.

In the case of a policy lapse, the policyholder will lose these bonus benefits.

How to Avoid Lapse of Your Health Insurance Policy

A policy lapse is a lot of inconvenience and trouble after all the hard work in narrowing down to the right policy. Listed below are a few tips to avoid a policy lapse.

• Keep track of the dates, set reminders, note down in your calendar- do whatever it takes so that you do not forget the payment date.
• Alternatively, you can make use of ECS, which will automatically deduct the premium from your bank account. You can set a time for deduction shortly before the due date and make sure there is adequate balance in your account during deductions.
• Insurers send reminders shortly before the deadline. Make sure you pay on the same day that you receive a reminder to avoid mishaps later.
• In the recent past, several insurance companies have linked with banks for the convenience of the customers. The policyholders have an option to pay premium through the ATM of these related banks. This can save time and also, help prevent a policy lapse.

• A policyholder can also choose to receive payment reminders through email or an SMS. In this way, the payment can be made at short notice.

Can the renewal be denied?

Initially, insurance companies had the rights to deny renewals that put them at a loss. In later years, a rule by the Supreme Court held that a health insurance policy could be renewed on the same terms if the insured pays the premium on time.

Renewing your health insurance policy on time is crucial as you do not know when an emergency would arise. It is like locking the door to your house every day. To enjoy the maximum benefits of a health insurance policy, you must remain punctual with your payments.

The writer is CEO of
Naval Goel
first published: Apr 17, 2017 04:03 pm
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