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What Happens if You Don’t Renew Your Health Insurance Policy on Time?

what will happen if you don't renew your health insurance on time

Health insurance policies are an essential investment, especially given the rising medical costs in India. They safeguard against financial setbacks while seeking medical treatment. However, remember that health insurance policies are usually offered as one-year plans and must be renewed annually.

Have there ever been instances where you neglected to pay your health insurance premiums?

Life can easily sidetrack our daily responsibilities, and we periodically need to remember to do essential activities like paying our bills and wondering what happens if we wait to renew our health insurance on time.

Read the article to learn more.

Team Digit

Disadvantages of Not Renewing
Reasons to Renew
Grace Period in Health Insurance
Ways to Avoid Policy Lapse
Things to Do Before Renewing
Ways to Revive Health Policy
Frequently Asked Questions

7 Disadvantages of Not Renewing Your Health Insurance on Time

what are the cons of not renewing your health insurance policy

There are many disadvantages to not renewing your health insurance on time. A few of them are listed below:

1. Interruption in Coverage

When you don’t renew your health insurance on time, and also forget to pay the premium within the grace period, the policy becomes inactive. This means that any claims filed between expiry and renewal will be rejected. And, when your policy lapses, you will have to buy a fresh health insurance cover.

You will not be covered for any medical emergency or hospitalization during this period, and will have to bear all the healthcare expenses out of your pocket.

2. More Waiting Periods

As we’ve seen above, when your policy lapses, you need to buy a new health insurance policy. In this case, the waiting periods from your previous policy will also lapse. These include waiting periods for pre-existing diseases, maternity benefits, and a number of other treatments and conditions, all of which you will have to complete once again from the start.

3. Loss of Your Cumulative Bonus

When you don’t make any health insurance claims during a policy year, upon renewal you will get the benefit of a cumulative bonus. This is when your insurer increases your sum insured without charging you any extra premium for it.

However, when you don’t renew your health insurance policy before it expires, you will lose the opportunity to earn this bonus.

4. More Expensive Premiums

When you don’t renew your health insurance policy on time you must buy an entirely new policy. And for this policy, your premium will be calculated from scratch, and due to both the lapsed policy and as you will be older, you may end up paying a higher premium than if you had renewed the policy on time. Thus, renewing a lapsed policy is more expensive.

5. Medical Check-Ups May be Required

When your policy lapses and you need to buy it again, your insurer might ask you to undergo some medical tests or check-ups, just to check the status of your health before issuing the policy. This may be a lengthy process and delay getting the policy, during which time you will not have coverage. Additionally, the medical exams might uncover previously unknown conditions which might increase your premium.

6. Loss of Income Tax Benefits

Under Section 80D of the Income Tax Act, 1961, when you pay a health insurance premium for yourself, spouse, parents or children, you can claim tax benefits and returns. But, when you fail to renew your policy, you will lose these savings for that year.

Like every other insurance policy, health insurance also needs to be renewed each year to ensure that you can avail of all of its benefits. And these days you can easily renew your health insurance policy online with a few clicks, it has become easier to do this.

Even if you choose to port your existing policy to a different provider, you must let your existing insurer know at least 45 days before expiry. If you do this afterward, you will not be able to transfer your waiting periods and no claim bonus.

7. Loss of Portability

Transferring your current coverage to a new health insurance provider allows you to change providers. However, you can no longer transfer your coverage to a better insurance provider after it expires. You then have to apply for a new policy with the potential provider, which may be subject to additional underwriting and, therefore, more costly. The coverage benefits that you may have will also not be transferred to the new policy.

Reasons to Renew Your Health Insurance on Time

There are numerous justifications for promptly renewing your health insurance policy, such as:

1. Preventing Policy Expiration

You can forfeit your no-claim bonus and be unable to file claims if your insurance expires.

2. Keeping Premiums From Rising

If your current insurance lapses, you might have to buy new insurance with a higher premium.

3. Refusing Needless Medical Examinations

By renewing on time, you can avoid some plans' prerequisites, which require medical exams before renewal.

4. Maintaining the Current Premium Rate

If you renew on time, you can maintain your existing premium rate, which is determined by your age, health history, and coverage length.

5. Retaining the Plan's Benefits

If you renew on time, you can continue to enjoy the plan's benefits uninterrupted.

6. Supporting Tax Advantages

Section 80D of the Income Tax Act provides tax benefits for the premium you pay. Discounts for long-term policies Multi-year health plans are eligible for savings from some insurance providers.

What is the Grace Period in Health Insurance?

Your grace period is the additional time you have if you miss the deadline for renewing your health insurance coverage. Penalties or cancelling your mediclaim coverage may result from failing to complete the payment within the grace period. There is typically a grace period on health insurance coverage.

If you cannot pay your health insurance premium because of unanticipated circumstances, the grace period gives you a fair opportunity to do so. Most insurance providers provide a 15-day grace period to pay medical insurance renewal premiums. However, some businesses additionally offer a 30-day grace period.

Ways to Avoid Lapsing the Health Insurance Policy

what are the ways to avoid health insurance lapsing

The following ways may be helpful if your insurance policy offers a full range of benefits and you don't want to deal with the hassle of having your expired coverage revived:

Ways to Avoid	Description
Track the Renewal Dates	Keeping track of the dates associated with your coverage is the best approach to preventing your health insurance from lapsing. Write down your dates somewhere and check frequently.
Set Reminders or Use Automated ECS	To avoid losing your coverage, you can set reminders to help you remember when and what to pay. An alternative is automated ECS. On or before the due date, ECS will automatically take the premium out of your bank account.
Get Direct Reminders from Insurers	As the due date draws near, many insurers issue reminders regarding premium payments. You have a grace period to make the required payment and keep the policy's benefits in effect if you miss the renewal deadline.
Pay Premium in ATMs	For your convenience, many banks and insurance firms have partnered. You can use these banks' ATMs to pay the premium in such a situation. This will reduce the likelihood of the policy lapsing and save you time and money.
Set Reminder on a Smartphone	Everyone in the modern world depends on smartphones, and this addiction may also benefit you. You can use the email or SMS reminder feature to attend your renewal date and always pay beforehand.

Things to Do Before Renewing Health Insurance

There are many things to consider before buying or renewing health insurance. Here are a few things you can do before renewing your health insurance:

Things To Do	Description
Recognise your Current Coverage	You should know what coverage you currently have. This will help finish the next phase, identifying your needs. Awareness of your current coverage prepares you for emergencies and lowers claim denial.
Recognise Your Present Needs	Your needs could alter as time goes on. You might not have considered purchasing maternity benefits when you were single. However, you might think about maternity coverage at this renewal.
Compare Policies	When you purchase insurance online, you can examine the coverage options and select the one that most closely matches your needs and price range. Evaluate several policies in the same category before choosing the finest one.

What are the Ways to Revive Health Insurance Policies?

what are the ways you can revive your health insurance policy

You can bring your policy back into effect by making the overdue premium payment with interest. The methods listed below can help you renew your expired policy:

Revival Ways	Description
Ordinary Revival	The health examination is optional if you choose to renew your policy within six months of the policy's expiration date. All you need to do is pay the interest and the outstanding premium.
Revival on Non-Medical Grounds	You can opt for revival on non-medical grounds and receive less than the promised guaranteed limit. Your claim will be processed after you’ve submitted proper documentation.
Revival on Medical Grounds	If you cannot succeed in regular revival and revival on non-medical grounds, you can pursue revival on medical grounds. Once you've undergone a medical examination, the amount to be revived will be determined.

Even if you port your existing policy to a different provider, you must let your existing insurer know at least 45 days before expiry. If you do this afterward, you will not be able to transfer your waiting periods and no claim bonus. So, now that you know what happens if you don't renew health insurance, ensure you constantly renew it on time to get the best of its benefits.

FAQs about Disadvantages of Not Renewing Health Insurance on Time

All

Do I need to renew my health insurance every year?

Yes, you need to renew your health insurance policy every year to make sure that it does not lapse, and that you can continue enjoying all of its benefits.

What happens if I forget to renew my health insurance?

Unfortunately, if you miss paying your renewal premium on time, your health insurance policy will expire. This means that you’ll have to start the process of buying your health insurance policy all over again!

Can my health insurance be renewed after it expires?

No, unfortunately once your policy has expired (and the grace period has ended) you must begin the process of buying your health insurance policy from the start.

What is the grace period allowed for policy renewal?

Most insurance companies will provide a grace period of 7-30 days after your policy has expired. While you will not have health insurance coverage during this period, it provides you with a window of opportunity to renew your policy and keep its continuity benefits such as cumulative bonus, and waiting periods.

What happens if I miss the deadline for renewing my health insurance?

Your health insurance coverage may be revoked for non-payment if you don't pay your premium during the grace period. You will not be eligible to receive coverage benefits in the event of a medical emergency or hospital stay.

How can my expired health insurance be renewed?

Reviving lapsed health insurance coverage requires contacting the insurance provider and requesting reinstatement. The insurance carrier will provide information on the exact procedure for reactivating your policy and any applicable fees or charges.

How can I quickly purchase health insurance?

The fastest way to purchase health insurance in the modern world is to buy coverage online. An online policy provides superior coverage and discounts over an offline policy.

Can I change my current health insurance plan at the time of renewal?

Yes, you can often change your health insurance plan during renewal. Most insurers offer different plans and options for coverage that you can adjust to suit your current needs during this time.

What if I am renewing my health insurance? Can I get the same coverage if I have a pre-existing condition?

Every health insurance policy usually covers pre-existing conditions; however, that may be different in various policies. If you are switching to a new policy or insurer, pay close attention to the terms regarding a pre-existing condition. Some might involve a waiting period or special coverage terms.

Is there a penalty involved if health insurance is not renewed on time?

Yes, you may face higher premiums or require a new policy underwritten based on your health status, which may be very costly. You may even be declined if you miss the deadline and do not use the grace period.

Can I renew my health insurance policy before it expires?

Yes, practically all insurance companies allow policy renewal before the expiration date. This way, you will not suffer from any coverage gap and will have continuous protection.

What documents are required for health insurance renewal?

One can be asked to show proof of identity, address, and a health status modification. It is better to confirm with the concerned insurance provider what documents will be required at the time of renewal.

Can I get my money back if my policy lapses?

No, there is no provision for a lapsed policy refund for insurance policies. You will not get a refund in this case.

Who gets the benefitted from the lapsed policy?

The insurer benefits because the policyholder and their family members will no longer be allowed to receive coverage from that policy.

Important Tips Related to Health Insurance

Health Tips for Women

How to Choose a Health Insurance Policy in India?

Right Age to Buy a Health Insurance Policy

Benefits of Group Health Insurance

Right Time to Buy a Health Insurance Policy

How to Choose the Best Health Policy for Senior Citizens?