What To Do When a Health Insurance Policy Lapses?

As per the Indian and Financial Express report, medical inflation in India hit 14% in 2024, and that pace shows no signs of slowing. In fact, healthcare costs are expected to rise by another 13% in 2025, outpacing the global average. At the same time, the average hospitalisation claim ballooned to nearly INR 70,558 in 2023–24, up from INR 62,500 the year before.

In practical terms, that means a single hospital stay now costs significantly more than before, and, not to forget, these numbers are just averages. Now imagine all that happening without health insurance coverage. That’s exactly what a lapsed health insurance policy leaves you with -  full exposure to soaring bills at the worst possible time. Missing your renewal might seem like a small mistake, but the medical insurance lapse consequences - like losing coverage, restarting waiting periods, and facing higher premiums - can wreck your finances.

This guide walks you through what to do if health insurance lapses, explains how the grace period in health insurance works, and lays out the health insurance policy revival steps so you can get protected again before it’s too late.

Why Do Health Insurance Policies Lapse?

A health insurance policy does not lapse overnight. It usually happens because the premium is not paid by the due date, and even the grace period in health insurance is missed. The reasons behind this miss are often simple, but the outcome can be serious. Let's take a look at the pointers below:

1. You forgot the renewal date: Sometimes life gets so busy that we hardly pay attention to policy reminders. This may lead to a missed renewal date.
2. Change in payment mode or bank details: In many cases, an expired auto-debit mandate or account closure can stop payments towards your premiums.
3. Financial constraints: Sometimes you may happen to postpone your premiums when money is tight. Miscommunication from the insurer – Mostly, insurance companies send reminders before the renewal date. Many people get used to relying on those alerts. So, if the message does not arrive on time or gets missed in an overloaded inbox, it can easily create confusion and cause you to skip the premium.
4. Sheer oversight – Sometimes, an “I’ll do it tomorrow” attitude until it is too late could also be the culprit.
   Whatever the reason, the result is the same - 'Lapsed Policy. No Financial Protection. What if a medical emergency arises during this gap? Your insurer would not pay a single penny. That’s why knowing what to do if health insurance lapses is absolutely essential.

Quick Tip! - Set up auto-debit for your health insurance premium payments and make sure your insurer always has your latest contact details.

The Grace Period in Health Insurance

In India, if you miss paying your health insurance premium on the exact due date, your first thought might be, “Have I just lost my coverage?” It is a stressful situation, indeed!

The good news is - most health insurance companies offer a grace period of about 15 to 30 days. This short buffer lets you have extra time to make the payment and keep your policy going without any lapses.

Here’s what you should know about it:

• Any claim you make during the grace period usually would not be settled until you have paid the pending premium.
• If you pay within this window, your policy continues smoothly, and you do not lose your accumulated benefits.
• If you miss the grace period altogether, it counts as non-renewal of health insurance, and your policy officially lapses.

So, have you missed the due date? Don’t panic. A missed due date does not always mean disaster - as long as you act within the buffer window.

Also Read: Points to Remember While Renewing Health Insurance

Medical Insurance Lapse Consequences

Always remember! Missing a due date is a problem. Missing the grace period is dangerous. And, don’t assume your insurer will chase you. One missed reminder can cost you years of protection. Let’s take a look at the fallouts of a lapsed policy:

1. Loss of coverage – You would not have financial protection if hospitalization occurs. You would be on your own for hospital bills.
2. Loss of No-Claim Bonus (NCB) – Years of careful planning can vanish overnight. Many policies reward claim-free years. A lapse often wipes this out.
3. Waiting period resets – Pre-existing conditions or maternity benefits may go back to square one after a lapse.
4. Higher premiums – Buying a new policy at an older age or with health issues is most likely to cost more.
5. Medical tests for revival – Insurers may ask you to undergo fresh check-ups before approving a health insurance policy revival.

You may be wondering about the solution. Always try to renew health insurance policies on time, in case you forgot, make sure that it gets renewed within the grace period only. This is the only way you can hold on to your health policy benefits.

What to Do if Health Insurance Lapses?

What would you do if you suddenly found out your health insurance is not active anymore? For many, that realisation comes only when they need the policy the most, but by then, it feels too late. The truth is, while a lapse is serious, it is not always the end of the road. You still have options, but you need to act fast.

Here’s how to go about it:

1. Check if you are still in the grace period: Missing the due date does not always mean you have lost your coverage. Most insurers give you a grace period of 15 to 30 days. If you are still within this window, just pay the premium right away, and your policy continues without any break in benefits.
2. Call your insurer without fail: What if the grace period has also ended? Don’t just leave it hanging. Get in touch with your insurer right away and ask about revival options. Some companies give you a short extension even after the grace period, although this is likely to come with late fines or medical checks.
3. Apply for policy revival: If revival is on the table, you are likely to need to fill out a form, clear the pending premiums (plus any fines), and possibly undergo medical tests. Once approved, your policy gets restored, and you usually keep most of your old benefits.
4. Explore a new policy if revival is not possible: You can also explore a new health insurance policy in case revival does not work. You can port your health insurance policy from one insurer to another as per your health needs. When you port a health insurance policy to another insurer, a waiting period may apply; always read the terms and conditions before you port your health policy.

The takeaway:  Policy lapse is not the end of the world, but it is not something you can ignore. The faster you act, the better!

Also Read: Important Terms You Must Know Before Buying a Health Insurance Plan

Last, But Not Least!

Your health is your most valuable asset, and insurance is the shield that protects it. A lapse does not have to mean the end of your coverage, but it does make things complicated.

So, make sure to treat your policy renewal as you would any other important financial commitment, like your EMIs, utility bills, and all. Taking this simple step now can help protect your well-being and finances should something goes wrong with your or your loved ones' health.

FAQS on Health Insurance Policy Lapses