What is the Grace Period in Health Insurance & How Does it Work?

The grace period in health insurance is a period of time beyond the due date, within which policyholders can make the premium payment. However, if you fail to pay the premium within the health insurance renewal grace period, the policy will automatically lapse and you will cease to receive its benefits. 

 

Let’s take up an example to better understand the concept of grace period in health insurance. Assume that you possess a health insurance policy whose due date for premium payment is on the 5th of every month. And the grace period offered by your insurance provider is 15 days from the due date. 

 

Now, say that due to unforeseen circumstances you missed paying the premium within the 5th of a month. What would happen? Would your policy lapse immediately? Fortunately, that wouldn’t be the case. Since you have a 15-day grace period for health insurance renewal, you can make the premium payment within the 20th of the month to keep your policy active. 

 

On the other hand, if you still fail to pay the premium within the grace period, which in this case is the 20th of the month, your policy would get cancelled. You will lose the insurance coverage and all the other benefits under the policy. 

Primary Features Of Medical Insurance Grace Period

When it comes to the grace period for renewal of health insurance, there are quite a few features that you should be aware of. Here’s a quick look at what they are. 

 

  • The grace period offered on a health insurance policy can be anywhere from 15 days to 30 days depending on the insurance provider you opt for. 

  • You continue to receive health insurance coverage even when you’re in the grace period of health insurance renewal grace period. 

  • By paying the insurance premium within the grace period, you can keep your insurance policy active. 

  • However, not paying the insurance premium within the grace period will lead to a policy lapse, requiring you to apply for a new health insurance plan. 

Is Grace Period and Waiting Period in Health Insurance the Same

No. The waiting period in health insurance and the grace period for a health insurance policy are two completely different concepts. 

 

As you’ve already seen above, the grace period is nothing but an extension of time beyond the due date for premium payment. 

 

The waiting period, on the other hand, is a period of time that you would have to wait for before you’re allowed to raise a health insurance claim. During the waiting period, none of the claims will be entertained by your insurer, even if the claim is for a disease covered by the insurance. Only upon the expiry of this period will the insurer accept health insurance claims. 

Renewal Of Health Insurance Plans During Grace Period

The grace period of a health insurance policy is essentially a relaxation that’s offered by insurance providers. Even if you’ve missed the due date for premium payment, you can still keep your policy active by paying the renewal premium within the grace period applicable for your policy. 

Disadvantages of Not Renewing Your Health Insurance Policy on Time

Paying your health insurance premiums on time is absolutely critical. Failing to do so can have disastrous consequences. Let’s take a look at a few of the disadvantages of not renewing your health insurance on time. 

    1.Policy Lapse 

Non payment of the health insurance premium within the grace period will automatically lead to a policy lapse. In the case of a lapsed policy, you will immediately cease to receive any insurance coverage and will lose all the benefits listed under the plan. 

    2.Inability to Renew the Policy 

If your policy has lapsed due to non payment of the requisite premium, insurance providers may prevent you from renewing the policy. All the accrued benefits on the policy up until the lapse will be lost, requiring you to avail a new health insurance plan at a much higher premium.

    3.Loss of Coverage for Pre-Existing Diseases

When you purchase a new health insurance plan to replace a lapsed one, you would be considered as a new customer. This will not only cause you to lose coverage for pre-existing diseases, but you would also have to go through the waiting period once again. Until the waiting period on the new insurance policy is over, you will not be able to make any claims whatsoever. 

Higher Premium During Grace Period

Now, although you can save your health insurance from lapsing by paying your premium during the health policy renewal grace period, it comes at a cost. Insurance providers often levy a penalty in the form of a late fee when you miss your due date for premium payment. 

 

Therefore, when you pay your premium when the grace period is active, you will be charged an amount that’s higher than your normal premium payment. This higher premium that you’re required to pay includes the regular premium payment amount and the late fee penalty. 

Failure to Pay the Premium within the Grace Period

When you don’t make the premium payment within the grace period for medical insurance renewal, your insurance provider will cancel your health insurance policy outright. This will not only lead you to lose insurance coverage, but all the accrued benefits like No Claim Bonus in Health Insurance will also be lost. 

 

Although you may still opt to purchase a new health insurance policy, many insurers may refuse to offer coverage due to your history of non-payment of premium. And since you would also lose the waiting period benefit, you will have to go through the waiting period once again and subject yourself to medical tests. 

How Grace Period Can Affect Your Claims?

Your coverage stays intact and active even when you’re in the grace period of a health insurance policy. This effectively means that you can still raise a claim for covering expenses related to a health emergency during the grace period. 

 

That said, this claim that you file will be accepted by your insurance provider only if you’ve paid the renewal premium before the said grace period expires. If you fail to make the payment before the expiry of the grace period, your policy will lapse and your insurer has the right to refuse the claim.

Conclusion 

As you can see, the grace period in health insurance is a very useful feature. It can keep you protected during times where you’re unable to make the premium payment on time before the stipulated due date. 

 

However, it is advisable to not wait till the grace period in health insurance gets activated. Instead, always make your premium payments on or before the original due date. This will prevent unnecessary hassles and ensure that you continue to receive coverage without any interruptions. 

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FAQs

  • ✔️What is the duration of the grace period in health insurance?

    Usually, the grace period for a health insurance policy is 15 days from the due date of payment. There are a few insurance providers that offer a grace period of up to 30 days from the due date as well.

  • ✔️ Do I have to pay any penalty for making the premium payment during the grace period for a health insurance policy?

    Yes. Most insurance providers will levy a late payment fee on top of the regular health insurance premium when you make the payment during the grace period.

  • ✔️Do I still get insurance coverage benefits during the grace period of a health insurance policy?

    Yes. You continue to receive insurance coverage benefits even when you’re in the grace period of a health insurance policy. However, any claims you make during this period will be entertained only if you’ve paid the renewal premium before the expiry of the grace period.

  • ✔️Is the waiting period the same as the grace period for a health insurance policy?

    No. The waiting period is the period of time you’re required to wait before you start receiving benefits of a health insurance policy. 

     

    Meanwhile, the grace period is a period of time beyond the due date, within which policyholders can make the premium payment.

     

  • ✔️How can I find out what the grace period in my health insurance policy is?

    Reading through your policy documents is the best way to find out what the grace period for your health insurance is. Alternatively, you can also get in touch with your insurance provider to get more clarity on this.