What consequences can arise from a policy lapse in health insurance?

A policy lapse in health insurance can lead to several significant consequences, with one of the most notable being an increase in future premiums. When a policyholder allows their insurance coverage to lapse, insurance companies may view this as a sign of increased risk. As a result, they could impose higher premiums upon re-application or when renewing coverage. This is particularly true in cases where the individual has experienced health changes during the lapse period, possibly leading to higher costs associated with insuring them.

Additionally, if a person has not maintained continuous coverage, they might face waiting periods for certain pre-existing conditions or might be subject to exclusions in their new policy. Having a lapse in coverage can also impact a person's overall insurability, as insurers may impose stricter conditions based on their previous history of coverage. Hence, the potential for increased premiums is a significant and practical outcome of letting health insurance coverage lapse.