Benefits of Renewing Health Insurance Policy Timely / 7092


Benefits of Renewing Health Insurance Policy Timely

Health Insurance policy, like life or car insurance, needs renewal at a specified frequency. If the renewal is not completed before the due date or the grace period, the policy lapses, and health care coverage ceases and accrued benefits are lost. Getting another health insurance policy is a possible solution, but the loss of accrued benefits can be a big setback especially if the policy had been in force for a long time.

Benefits Of Renewing Health Insurance Policy On Time

Following are the benefits of renewing the health insurance policy on time, let us try to understand this in detail.

1. Coverage is Continued

This part is straightforward, and most people probably understand the implications. The moment a health insurance policy lapses, coverage benefits cease immediately. The risk of exposure due to this is well understood. Accidents and hospitalization due to other reasons can strike anytime; if the coverage is not in force, a financial crisis on top of a health emergency is a double blow.

It is in our best interests to have continuous health insurance coverage for life’s unforeseen catastrophes.

2. Loss of Benefits Doesn’t Happen

A lapsed policy also means loss of accrued benefits which may or may not get reinstated in case the same insurer allows revival of a lapsed policy.

  • No-Claim Bonus: For every claim-free year, insurance companies reward policyholders with a “No-Claim Bonus (NCB)” at the time of renewal. This bonus could either be a discount on the premium amount or an addition to the existing sum insured for the same premium amount (usually around 5% of the sum insured).If there is a policy lapse, cumulative NCB, which can often be a sizeable amount depending on “in-force” policy tenure, is lost. It is thus clear that to continue to avail this benefit, policyholders should always continue with policies that are in-force.
  • Pre-existing Clause: Terms and Conditions of an insurance policy lay particular emphasis on “Inclusions and Exclusions”. Most policies clearly mention how they handle claims for pre-existing diseases. Usually policy holders with pre-existing conditions need to wait anywhere between 12 to 48 months before the policy allows any claim related to such condition or disease. When a policy lapses, this elapsed time could be reset resulting in further delay before the coverage for pre-existing conditions can begin to apply.
  • Wait Time: Like the Pre-existing clause, there is another waiting period known as the “wait time” which is the amount of time a policy holder needs to wait post enrolment before submitting any claim. If the wait time is not over, claims submitted will be rejected by the insurance provider. In recent times insurance regulations provide some relief where the policy has been renewed for long, but in case of policies with brief history, the wait time resets as soon as policies lapse.
    These benefits take time to accrue, hence non-renewal can result in having to start all over again.

3. Insurance Eligibility is Maintained

Insurance renewal is also key for people who are about to step into the entry age restriction zone. If the policy is in force, it qualifies for lifelong renewability. However, if a new policy is sought in this age bracket, mostly insurance will be denied due to entry age restrictions followed by insurers.

4. Portability Eligibility is Kept Intact

A policy that is in-force can be allowed to be ported by another insurer, but a lapsed policy doesn’t qualify for such consideration.


Health insurance plans are almost indispensable in modern times. It is easy to see the benefits available with continuous coverage. Policyholders should pay close attention to the due date and grace period and renew policies timely.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard



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