What is Reinstatement of Health Insurance Policy: How Does It Work?

Health insurance is an essential aspect of financial planning, providing protection against medical expenses that can arise unexpectedly. However, sometimes, due to reasons such as financial constraints, forgetfulness, or other unforeseen circumstances, a policyholder may miss paying the premium on time, causing their health insurance policy to lapse. When this happens, the insurance provider may offer a reinstatement option, allowing the policyholder to restore the coverage and continue enjoying the benefits.

In this blog, we will dive deep into the reinstatement of health insurance, explaining how it works, when it applies, and the steps involved in reinstating a lapsed policy.

What is Reinstatement of Health Insurance?

Reinstatement in a health insurance policy refers to the process of restoring a lapsed policy after the policyholder has missed a premium payment. If you fail to renew your health insurance policy on time, your policy may become inactive or "lapsed." In such cases, you can opt for reinstatement to re-activate your coverage.

Reinstatement usually happens within a grace period, but the insurance company may require the payment of overdue premiums along with certain formalities, such as submission of health check-up reports, depending on how long the policy has lapsed.

Key Points About Reinstatement:

• Not all policies offer reinstatement; it depends on the insurance provider.
• There could be certain conditions or penalties attached to the reinstatement.
• Reinstatement usually requires the policyholder to clear pending premiums and other dues.

Grace Period: What It Is and How It Works?

Before diving into the reinstatement of health insurance process, it’s important to understand the concept of a grace period. A grace period is a window of time after the premium due date during which the policyholder can still make the payment without affecting the continuity of the policy.

• Grace period duration: Typically, the grace period for health insurance policies lasts from 15 to 30 days, depending on the insurer.
• During the grace period: You can still avail the benefits of the insurance policy, such as hospitalisation coverage or outpatient care.

If the grace period expires without payment, the policy lapses, and reinstatement may be required to restore the policy. After the grace period, the policyholder loses the rights to claim benefits, and the insurer might offer the reinstatement option.

Also Read: Can We Claim Health Insurance From Two Companies?

When Does Reinstatement Apply?

Reinstatement applies when a policyholder has failed to pay premiums within the grace period and the policy has lapsed. Lapsed policies are no longer active, and you can no longer avail of any benefits like hospitalisation, medical treatment, or cashless claims. However, if you wish to restore the coverage, you can opt for reinstatement.

Situations Where Reinstatement Is Applicable:

• Missed premium payment: If you missed paying the premium before the grace period ends.
• Policy lapse: When the grace period has passed and the policy has lapsed, you may still have the option to reinstate it.
• Health deterioration: If your health has deteriorated, you may need reinstatement to continue receiving coverage under the existing plan.

Types of Reinstatement

There are generally two types of reinstatement options offered by insurance companies:

1. Automatic Reinstatement

This option applies to policies that automatically come back into force once the premium is paid within the grace period. Some insurers offer automatic reinstatement without requiring any paperwork, especially if the policy has lapsed due to non-payment of premiums.

2. Manual Reinstatement

If the grace period has passed, or if the insurance company does not offer an automatic reinstatement option, the policyholder may need to go through a manual reinstatement process. In this case, the policyholder must apply to the insurer and fulfil the required formalities, such as medical checks, clearing overdue premiums, and possibly paying a reinstatement fee.

Reinstatement Timeline: Deadlines and Validity

The timeline for reinstatement largely depends on how long the policy has been lapsed. If reinstatement is sought immediately after the policy lapses (during the grace period), it is typically a straightforward process.

However, if a considerable amount of time has passed (usually 3 months to 1 year), the insurer might require you to undergo medical tests or submit documents that prove that your health hasn’t changed significantly since the policy lapsed. Some policies also have specific reinstatement deadlines, so it’s important to act quickly.

• Reinstatement Validity: Typically, once reinstated, the policy will be restored back to its original status, meaning the sum insured, coverage, and terms remain unchanged.
• Lapsed Coverage: If the policy lapses for a long duration, there could be a probation period before coverage resumes.

How to Request Reinstatement? – A Step-by-Step Guide

If your health insurance policy has lapsed, here's how you can request reinstatement:

1. Check Your Grace Period: Ensure that you are still within the grace period. If so, you may not need to go through the full reinstatement process.
2. Contact Your Insurance Provider: Reach out to your health insurance advisor or directly contact the insurer to understand the reinstatement options available.
3. Clear Outstanding Premiums: Make the payment for overdue premiums. You may need to pay premiums for the period during which the policy was lapsed, and this could involve late fees.
4. Submit Medical Documents (if required): In some cases, the insurer might ask for medical reports or health check-up details before reinstating your coverage.
5. Fill out the Reinstatement Form: Complete any necessary paperwork or forms required by the insurer to initiate the reinstatement process.
6. Pay Reinstatement Fees (if applicable): If the insurer charges any fees for reinstating the policy, make the payment as per their instructions.
7. Wait for Confirmation: After submitting all the necessary details, wait for your insurer to confirm the reinstatement of your policy.

Also Read: What is Health Insurance EMI and How Does it Work?

Eligibility Criteria and Possible Grounds for Denial

Not all policyholders are eligible for reinstatement. Here are some eligibility criteria and possible grounds for denial:

Eligibility Criteria:

• The policyholder must apply for reinstatement within the specified time frame (usually within 3-12 months after the lapse).
• The policyholder must clear all pending premiums along with any applicable fees.
• The policyholder should not have any adverse medical conditions or have made any significant claims during the lapsed period.

Grounds for Denial:

• Failure to meet the time frame for reinstatement.
• Non-payment of premiums or unpaid fees.
• Deteriorating health condition that no longer qualifies for the existing coverage.
• Multiple lapsed premium payments or a history of frequent policy lapses.

Reinstatement Fees and Charges

While reinstating a policy, the insurance company may charge a reinstatement fee, which can vary based on factors like:

• The duration of the lapse.
• The type of insurance plan.
• Administrative costs associated with reinstating the policy.

It’s important to calculate the health insurance premium and clarify these fees with the insurer before proceeding.

Benefits of Renewing Your Health Plan Over Reinstating It

While reinstatement can be an option, renewing your health insurance is often a better and more straightforward choice. Here are some reasons why:

• No Medical Tests Required: If you renew your policy on time, you typically won’t have to undergo medical tests, whereas reinstatement may require a health check-up if the policy has lapsed for a long time.
• No Additional Fees: Renewing your health insurance before it expires often avoids extra fees or charges that might be incurred during reinstatement.
• Continuous Coverage: Renewing ensures that your health cover is continuous, and you won’t have any gaps in your coverage. This is important for maintaining the full benefits of your insurance.

Conclusion

The reinstatement of a health insurance policy offers a lifeline to individuals who have missed their premium payments and wish to restore their coverage. However, it’s important to act quickly and understand the conditions that apply to the reinstatement process. While reinstatement can restore coverage, renewing your policy before it lapses is always the best way to avoid complications, additional fees, and health checks.

If you ever find yourself in a situation where your policy has lapsed, don’t hesitate to contact your insurer or health insurance advisor to guide you through the reinstatement process. Being proactive can help you avoid unnecessary stress and ensure that you remain protected against unexpected health-related expenses. To avail of the best online health insurance plans, visit Bajaj Allianz Health Insurance.

FAQs

1. How long is the reinstated sum insured valid for?

Once reinstated, the sum insured is valid for the remainder of the original policy period, with no reduction in coverage.

2. Can I use the reinstated sum insured for the same illness again?

Yes, the reinstated sum insured is available for future claims, but you cannot use it for the same illness or treatment if it occurred during the lapsed period.

3. Is it possible to reinstate my lapsed health insurance policy anytime?

No, reinstatement must happen within a specific time frame after the policy lapses (usually 3 to 12 months).

4. Do I need to pay a fee to reinstate my lapsed health insurance policy?

Some insurers may charge a reinstatement fee, which varies depending on the company and the duration of the lapse.

5. Can I reinstate my policy if I missed multiple premium payments?

Yes, but the insurer may require a longer process, including medical checks and submission of additional documents.

6. Will my health insurance coverage stay the same after reinstatement?

Yes, once reinstated, your policy coverage will remain the same as before the policy lapsed, as long as the insurer approves the reinstatement.

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***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.