Harmony Health Insurance Lapses Policy Without Grace Period Reminder, Demands Medical Exam for Reinstatement

Ms. Wu of Shenzhen purchased a 30-year critical illness policy from Harmony Health Insurance in December 2020 and had paid premiums for five consecutive years. The sixth renewal payment was due on December 26, 2025, but failed because her bank account had insufficient funds. The policy then entered a 60-day grace period. During that period, Harmony Health Insurance did not send any reminder via SMS, phone, email, or other verifiable means. On February 25, 2026, the first day after the grace period ended, the company sent an SMS notifying Ms. Wu that her policy had lapsed. Wu immediately applied for reinstatement. A customer service representative told her that reinstatement would require a new medical examination and underwriting. On March 13, 2026, Harmony Health Insurance sent a medical examination notice listing dozens of tests, with the costs to be borne by Ms. Wu.

Wu's contract terms state that the policyholder bears responsibility for consequences such as policy suspension due to insufficient account balance. The Customer Service Guide notes that failure to pay renewal premiums within the grace period will automatically suspend the policy's coverage. During the trial, Ms. Wu argued that the contract did not specify a medical exam requirement for reinstatement, and Harmony Health Insurance did not explain the necessity of the many tests.

A similar case involved Xiaomi of Shanghai, who had paid premiums for four years on a Harmony Health Insurance critical illness policy. When a premium deduction failed in 2024, the company sent an SMS reminder. However, in 2026, after another deduction failure, the company sent no reminder during the entire 60-day grace period. Xiaomi said that undergoing the medical exams required by the company would cost at least 3,000 yuan.

A health insurance company insider said that during the 60-day grace period, insurers typically inform policyholders of failed payments via SMS, and some long-term policies trigger phone calls or automated voice calls. A bank-affiliated life insurer official said that in addition to SMS, phone, or email notifications, letters are sent to the address provided by the policyholder. A major life insurer insider noted that within a 35-day reminder period, notifications are sent via SMS, paper letters, or email; lapse notices are sent via SMS, and white-list clients receive paper letters or emails; service representatives make phone calls as a supplementary measure.

Regarding the reinstatement process, the health insurance insider explained that the first day after the grace period is no longer within the grace period, and most insurers have standardized reinstatement procedures. The major life insurer insider said that within five days after the grace period, policyholders typically only need to pay the overdue premium to restore coverage, without re-underwriting. For reinstatement applications that require re-review, the company decides whether to require a medical exam based on the product type, changes in the policyholder's health risk during the lapse period, and the duration of the lapse. The bank-affiliated life insurer official said that after the grace period, insurers will likely require a new medical exam and underwriting; for policies that have been in force for five to six years, the main concern is the insured's health changes during that period.

According to Article 36 of the Insurance Law of the People's Republic of China, if a policyholder fails to pay premiums on time, the contract is suspended 30 days after the insurer's reminder or 60 days from the due date. The article does not impose a statutory obligation on insurers to send multiple reminders or to ensure successful notification during the grace period. Article 8 of the Judicial Interpretation of the Insurance Law states that after a policy is suspended, if the policyholder applies for reinstatement and agrees to pay the overdue premiums, the court will not support the insurer's refusal to reinstate unless the insured's risk level increased significantly during the suspension period. Lawyer Liu Sihan said that when a consumer applies for reinstatement just one day after lapse, the insurer's demand for a medical exam lacks sufficient basis; the insurer must prove that the consumer's risk level increased significantly during that single day.

According to public information, Harmony Health Insurance was approved to commence operations in 2006 and has 15 provincial branches, 37 central sub-branches, and five sub-branches nationwide. Due to being in a risk-disposal transition period, the company has not disclosed annual reports or solvency reports from 2017 to 2025. According to its 2025 social responsibility report, the company achieved full-year operating revenue of 758.26 billion yuan and premium income of 634.58 billion yuan. The 2024 social responsibility report showed operating revenue of 753.25 billion yuan and original premium income of 641.16 billion yuan. Its 2025 consumer protection regulatory evaluation rating was 2C, with an overall score of 75.6. In 2025, the company received 1,773 total complaint cases, including 316 forwarded by the National Financial Regulatory Administration and its local offices.