Claim rejected because the policy lapsed

A health policy has a grace period after the renewal date: 15 days when you pay monthly and 30 days in every other case (IRDAI (Insurance Products) Regulations 2024, Schedule III). Renew inside it and the policy counts as continuous, with every waiting-period credit kept.

Cover during those days depends on how you pay. If you pay in instalments, the insurer has to cover you through the grace period. On a single annual premium paid late, cover need not run for the days with no premium paid (Health Master Circular, para 9). A claim from those days can be refused on an annual policy even when you renew in time.

A life policy has the same 15 or 30 days of grace, and it stays in force with full risk cover through them (Schedule I). After that, a lapsed policy can be revived within five years of the first unpaid premium for a traditional plan, or three years for a unit-linked plan, once the insurer is satisfied you are still insurable. A traditional plan that has a surrender value stays in force as a paid-up policy unless the paid-up sum is very small.

If the death or hospitalisation fell inside the grace period, challenge the rejection. Write to the insurer first, which has 14 days to resolve it, then go to the Insurance Ombudsman within one year if that fails.