Health insurance policies are an important investment, especially with the rising medical costs in India. It acts as a safeguard against financial setbacks while availing medical treatments. However, always remember that health insurance policies are usually offered as one year plans, and need to be renewed on an annual basis.

While some insurers will send you a renewal notice before the expiry of your policy, others will leave the responsibility renewal up to you. However, a few companies will offer a short grace period (usually around 15-30 days) after the end of your policy period. Although you will not get health coverage during the grace period, it still gives you a window to renew your policy and get continuity benefits.

If you fail to renew the policy on time, it will lapse, and you will lose a number of benefits that come from policy continuation. These include things like cumulative bonuses and waiting periods. That is why it is important to renew the policy on time.

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.