Dangers of Letting Private Medical Insurance Lapse

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5 Dangers of Letting your
Private Medical Insurance Lapse
+2 Solutions

“Dear Client,
Your next Private Medical Insurance premium is due on XX/YY.”


Does anyone truly like paying for their private medical insurance? Probably not. Nonetheless making sure you’re on top of your next payment is very important, no matter if that’s a next payment installment or an annual renewal.

Life happens, people’s personal financial situations change which can affect your cashflow and ability to continue with your medical insurance. So what happens if you find yourself in that situation? 

Well first, there can be huge consequences if you allow your private medical insurance premium to lapse.  We’ll look at those consequences plus some common solutions if you’re asking yourself ‘should I continue to pay for my private medical insurance?”

🔥 5 Dangers of Letting your Private Medical Insurance Lapse 🔥 

So what happens if you let your Private Medical Insurance lapse? You don’t have any insurance and you’re then financially on the hook for any unexpected medical bills. That may not be an issue if it’s a minor claim, but can cause issues if it’s a more serious accident, injury or diagnoses. 

From an insurance perspective here are the 5 dangers of letting your policy lapse:

number 1 Treated like a brand new member
If you go back to your old insurance company, they’ll treat you like a brand new member. They will not care that you were previously insured with them. They cannot simply let you back in like nothing happened. Even if you didn’t claim with them, you’re starting over from day 1 again. 

number 2 1 Every single tiny little claim will be treated as a pre-existing condition
Not only that, your old provider will know every single little minor claim and treat that as a pre-existing condition. Every little bump, bruise, sniffle will have to be re-underwritten again and subject to them accepting it again, if at all.  

number 3 If you’ve had a fairly serious pre-existing condition, it’s very hard to get it covered by any new provider ever again

What about if you’ve put through a major claim for something serious? Then it’s very hard to get serious conditions ever covered by a new provider again with private medical insurance. Keep in mind, they’re job is to make money. They’re not going to just pick up the liability to have major conditions that were previously covered under your old policy again.


number 4 Start over new again with a new provider

So where that usually leaves you is starting over again with a new provider. We’ll take a look at this solution in the next section. 


When this happens, you’ll need to build up good history again. Good history with provider is being continuously insured with them for a period of time, where you’re either not claiming or have very simple, black and white claims for minor things. For major things, you generally need time. The more time the better, as it’s less likely that it’s related to a pre-existing condition which you had before the policy onset. 

For example, if you’re diagnosed with Gout 1.5 months after you sign up, it’s very likely that the claim will be denied. Gout doesn’t just occur, it’s a build up of uric acid over a period of time which is usually caused by an unhealthy diet and lifestyle choices.  So while acute gout symptoms may have presented itself after your start date, the root cause of the problem is before.

 The longer you have history of no claims, the better.

number 5 Higher chance of denied claims.
So if you change providers, you can have claims that would’ve been covered by your old provider, now excluded by your new provider.  This isn’t as relevant for acute minor injuries or illnesses, but more so for more major diagnoses, chronic conditions,etc. The ones that cost the most, the ones that you need private medical insurance for the most.

2 Solutions if you’re in a financial bind
number 1  Renew with your current provider

This is always the best option, as you’re already underwritten, and you have or don’t have claims with them.

  👉 Have claims
Great, they’ve already proven to pay out for whatever claim you’ve placed through them. 

  👉 Don’t have claims
Then you at least have recorded a history of no claims with them. The longer you’re continuously insured with the same provider the harder it is for any claims to be denied. You don’t want to throw 1, 2, 3+ years worth of no claims away. 

If you simply cannot afford your current plan exactly how it is, then here are options to consider:

  • Remove unnecessary benefits, just focus on inpatient to cover high-ticket medical treatments
  • Reduce your coverage area.  Most modern insurers will cover you during temporary trips outside of your main coverage area. 
  • Add a deductible or increase your deductible
  • Pay with installments
  • Pay with a credit card

Keep in mind that you can only adjust your plan at the annual renewal date, not mid-year when your next quarterly or semi-annual installment is due. 

number 2 1 Change Providers; downgrade to something more affordable

Having some insurance is safer than having no insurance. So if your current provider is no longer tenable, then your Tenzing advisor can help you find a more cost effective provider and plan. 

With this option, you still expose yourself to risk as you have to be newly underwritten again and start from scratch with a new provider again. 

When downgrading in process, you’ll likely need to make one or multiple concessions, whether it’s about not having a benefit, key feature or simply taking a provider that isn’t as user friendly or doesn’t offer as safe of terms & conditions. 

  🎯 Conclusion:

If possible, look to renew with your current provider with one of our cost-cutting measures. Private medical insurance is all about covering future unknowns, you cannot simply turn your policy on and off as you please. Accidents, injuries, diagnoses do not wait for you to be insured.  

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    Patrik Shore Tenzing Pacific Services

    Patrik Shore

    Senior Advisor
    From Sweden & New Zealand
    7 years' insurance experience
    Joined Tenzing in 2019
    Crim Science
    Speaks English and Swedish

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