What Will Happen If My Policy Lapses During A Medical Emergency?

Jan 29, 2018 | 1 year ago | Read Time: 2 minutes | By iKnowledge Team

A policy usually lapses when you are unable to make the premium payment in time. However, most health insurance plans have a grace period of 30 days before which you can pay your premium. In case, this grace period has also passed, then there’s a high chance that the benefits you accrued through your health insurance will cease to exist too. In such a scenario, you will have to bear all the costs of your treatment. This can be extremely disheartening when you are faced with an emergency. But there’s still some hope, insurance companies may reconsider giving you the benefits of a lapsed policy under following circumstances:

  1. Choose a beneficiary

You can avoid the situation of your policy being lapsed altogether, if you handover the responsibility to take care of you and your policy to an assigned person. For example, you can authorise a beneficiary or your financial attorney to pay premiums on your behalf by utilising your funds, when you are unable to.

  1. Contact the insurance company

Alternatively, you can also get in touch with your insurance company and give them the details of your situation. If you are hospitalised and you inform them about your policy, which is about to lapse or has just lapsed, they will consider your case. They will first understand your situation and then provide necessary assistance.

Here are some ways that an insurance company helps you avoid the lapsing of your policy.

  • Grace period: Most health and life insurance policies come with a grace period. This grace period can be anywhere between 30 to 45 days depending on the type of policy and insurance company. During this period, you as the policy holder or your beneficiary or your financial attorney can make the payment of the premium. This grace period acts as a safety blanket, instead of you completely losing the benefits of the policy.
  • Policy renewal: Policy renewal has now become extremely simple thanks to the various modes of payment available. You can renew your insurance policy online during the grace period. However, do read up on the renewal of the policy, as it might entail fresh terms and condition.
  • Waiver of Premium: Whenever you do buy life insurance, remember to opt for the waiver of premium option. This feature provides coverage in case of medical emergencies upon non-payment of premium. For instance, if you are hospitalised and are unable to make the payment of the premium, with the help of this clause you may not have to pay the premium for the policy. Do read up on the terms and conditions of your policy to get a better understanding.

Conclusion:

The need for a health insurance depends on your goals, so try your best to pay your insurance premium on time so that the policy does not lapse. After all, your intention is to receive the help when you need it the most. It is also important to contact insurance providers during such situations, they can help and guide you on the way forward. A great tip would be to opt for the auto-pay mode for the premium amount, this way you are guaranteed that your policy will never lapse.

To know about AegonLife’s saving plans and other products like ULIPs, visit our home page.


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