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What is reinstatement of health insurance?

Team AckoNov 17, 2023

Sometimes, you may not be in a good financial position to pay the health insurance premium or renew the policy within the given timeframe. This can lead to a lapse in your policy, leaving you uninsured. Once this happens, you are completely exposed to financial issues in case of a medical emergency. Thus, it is important to get the lapsed policy reinstated at the earliest. In this article, you will learn about the details associated with reinstatement of health insurance plans in detail

Contents

What is the reinstatement of health insurance?
When Does Reinstatement in Health Insurance Occur?
How Does Reinstatement Provision in a Health Insurance Policy Work?
How is renewing a health plan better than reinstatement?
Role of grace period in the reinstatement of a health plan
What happens if you are unable to pay the outstanding premium?
How to revive a lapsed health insurance policy?
Can reinstatement be denied?
Frequently asked questions

What is the reinstatement of health insurance?

Reinstatement of health insurance refers to the process of restoring a health insurance policy that has lapsed, or been cancelled, due to non-payment of premiums or other reasons. When a health insurance policy lapses, it means that the coverage provided by the policy has ended and is no longer in effect.

You must contact the insurance company to request a reinstatement of a lapsed health insurance policy. The insurance company may require you to pay any outstanding premiums or fees that are due and may also need you to pay a reinstatement fee. The insurance company will provide you with information on the specific process for reinstating your policy, including letting you know of any fees that may be required.

It is important to carefully review the terms and conditions of your health insurance policy before requesting reinstatement, as you may be subject to certain conditions or restrictions that could impact your ability to reinstate the policy.

When Does Reinstatement in Health Insurance Occur?

On one hand, healthcare costs are increasing and on the other ailments and health problems are always on the rise. Therefore, your sum insured can run out even before you renew your policy, and there will be nothing to protect you in case of emergencies. In fighting this, reinstatement becomes the option.

In other words, when the basic health insurance limit has been exhausted, the reinstatement is needed.

How Does Reinstatement Provision in a Health Insurance Policy Work?

Imagine an unfortunate situation where you've used up all your health insurance coverage before the expiry date of your policy. Suddenly, you're left with no backup for emergencies. Here's where the reinstatement provision steps in.

When your insured sum runs out, it's reset to its original value under this provision. But, keep in mind, there are rules and conditions tied to the reinstated amount. To get clarity on rules for carry overs and usage, give your policy document a good read.

How is renewing a health plan better than reinstatement?

Renewing a health insurance plan is comparatively more beneficial than reinstating a lapsed policy, as it allows you to continue your coverage without a penalty. When you renew a health insurance policy, you agree to continue your coverage for another policy period (typically one year). In contrast, when you reinstate a lapsed policy, you are essentially starting a new one, and you may also need to pay a fine and a reinstatement fee.

The benefits of renewing a health insurance policy rather than reinstating a lapsed policy are as follows.

Continued coverage

Renewing your policy allows you to continue your coverage without interruption, which can provide peace of mind and help to protect you from unexpected medical expenses.

No outstanding premiums or fees

When you renew your policy, you have to pay the applicable premium with no additional charges.

No reinstatement fee

Renewing your policy does not require a reinstatement fee, which can save you additional money.

No change in coverage

Renewing your policy generally does not change your coverage, so you can continue relying on the same insurance coverage level.

Role of grace period in the reinstatement of a health plan

A grace period is a specified time frame during which you have the opportunity to pay your applicable health insurance premiums and avoid a lapse in coverage. If a policyholder misses a premium payment and the policy lapses, they may be given a grace period during which they can make the missed payment.

The length of the grace period depends on the terms of the health insurance policy and the insurance provider. Some policies may offer a grace period of 30 days or more, while others may have a shorter grace period of 15 days or less. It is important to carefully review the terms of your policy to understand the grace period that applies to your coverage.

What happens if you are unable to pay the outstanding premium?

If you cannot pay your outstanding premiums within the grace period, the insurer will most likely cancel your health insurance policy, and you will no longer have coverage.

In this case, you may be able to reinstate your policy. You may also be required to undergo a new underwriting process, which could change your premium or coverage.

The grace period plays an important role in the reinstatement of a health insurance policy, as it allows you to avoid a lapse in coverage and continue to receive the benefits of the policy.

How to revive a lapsed health insurance policy?

To revive a lapsed health insurance policy, you will need to contact the insurance company and request reinstatement. The insurance company will provide you with information on the specific process for reinstating your policy, including any fees or charges that may be required.

If you cannot revive your lapsed health insurance policy, you may need to consider purchasing a new one. It is important to shop around and compare policies from different insurance providers to find a policy that meets your needs and fits your budget.

Can reinstatement be denied?

Yes, an insurer may deny reinstatement of a lapsed health insurance policy in certain circumstances. The reasons for denial may vary depending on the terms of the policy and the insurance provider, but some common reasons are as follows.

Non-payment of premiums

If you have missed multiple premium payments and the policy has lapsed, the insurance company may deny reinstatement if you are unable to pay the outstanding premiums and fees.

Change in health status

If your health status has changed significantly since the policy was originally issued, the insurance company may deny reinstatement if you are no longer considered an acceptable risk.

Fraud or misrepresentation

If the insurance company determines that you have engaged in fraud or misrepresentation in connection with your policy, they may deny reinstatement.

Policy limits

If the policy has reached its maximum benefit limits or has been terminated due to a change in the law or other circumstances, the insurance company may deny reinstatement.

Also read: Family health insurance plans

Frequently asked questions

Here are some common questions and answers about reinstatement of health plans.

How Long Can I Use the Reinstatement Value?

Generally, the reinstated value holds good from the date of hospitalisation claimed till the end of the policy's validity.

Can I Use the Reinstatement Value for the same illness again?

Yes, the claim amount will be paid in case of a similar hospitalisation for an approved claim.

Can I reinstate my lapsed health insurance policy at any time?

In most cases, you can request reinstatement of a lapsed health insurance policy at any time, provided you meet the requirements for reinstatement. However, it is important to note that the insurance company may deny your request for reinstatement if you cannot pay any outstanding premiums or fees.

Will I have to pay a reinstatement fee to revive my lapsed policy?

Sometimes, you may be required to pay a reinstatement fee to revive a lapsed health insurance policy. The reinstatement fee is a one-time charge necessary when you request reinstatement of a lapsed policy. The fee amount may vary depending on the insurance company and the chosen medical insurance plan.

Can I reinstate a lapsed policy even if I have missed multiple premium payments?

It may be possible to reinstate a lapsed policy even if you have missed multiple premium payments; this mostly depends upon the insurer. However, you may be required to clear all dues and pay the necessary penalty before the insurer issues the policy.

Will my coverage be the same after reinstating a lapsed policy?

In some cases, your coverage may be the same after reinstating a lapsed policy. However, this depends upon various factors like the type of plan, your health status, the authenticity of the information you provide, the insurance company's rules, etc.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.