All About Grace Period in Health Insurance
Published On Jan 27, 2020 5:30 AM By Yamini Sharma
When you buy policy online, you expect it to ensure financial stability and smooth medical treatment during a medical emergency. This is something quite fair on your part.
However, there are times people find their health insurance failing to be of any good use.
While the reasons for policy dissatisfaction may differ from person to person, it is a fact that most people fail to avail policy renewal in the first place, which in turn, puts them in the situation where they find their policy useless.
The good thing is that ‘Grace Period’ exists in health insurance!
What is Grace Period?
In health insurance, grace period is defined as the total number of days that the policyholder gets to pay premium for their plan even after the due date has passed.
Grace period, in other words, is the extra time that a policyholder is given in case the latter misses making the payment on the renewal date.
During the grace period, an insured individual can make premium payment, without letting their policy expire.
It is important to learn that insurance companies have to offer a grace period of 15 days so that payment for health insurance renewals can be made. There are companies that offer a grace period of 30 days as well. Thus, the number of days under grace period is subject to the type of insurance company as well as the type of policy you have opted for.
The difference between waiting period and grace period?
Many policyholders confused grace period with waiting period. However, the truth is that both are completely different terms.
While the grace period is the number of days granted by the insurance company to pay for premium renewal even after the due date has passed, the waiting period is the time one has to wait before they can file a health insurance claim.
What if I fail to pay renewal premium in the grace period as well?
Paying renewal premium in the grace period prevents the policy from expiring. In other words, if you don’t pay the health insurance renewal premium even in the grace period given by your health insurance company, your policy will expire.
So, if your policy renewal date is 1st Feb 2020 and somehow you forget to pay the premium on time, you will get a grace period of 15 days or 30 days, as per your company policy. If you fail to pay renewal premium during this period, unfortunately your policy will expire by all means.
What if I am ready to make premium payment after the grace period?
Once your grace period is over, your health insurance company will not accept any payments. Therefore, your policy will not be renewed by the company even if you are extremely willing to make the payment as soon as possible.
So, if you want to prevent your policy from going lapse, make it a point to pay the policy renewal premium before the due date or at least in the grace period.
Is there any way to revive the lapsed policy?
If you want to know whether or not there are chances of your lapsed policy being revived, read : Missed the Renewal Date of Health Insurance Plan? Here Are the Solutions!
Are there any other major disadvantages of not making the renewal payment on time?
- No policy renewal - Not making the renewal premium payment on time will lead to a policy lapse. So, you will have to start with a new health insurance policy all over again, which means there will be a major loss of benefits which you could have enjoyed.
- Loss of coverage benefits during grace period - Since your payment was not made in a timely manner, you will not be eligible for availing any kind of benefits, in case you have to make a claim in the grace period.
- Change in pre-existing coverage period - In case, your policy gets lapse, your insurance company will treat you as a new customer. What’s more is that any existing illness will be considered as a pre-existing condition. Also, you will have to go through the waiting period.
- Waiting period - Waiting period for any condition or illness will re-start.
- Other losses - If your policy gets lapse, you will also lose any earned bonuses such as no claim bonus on your previous health insurance policy. The insurance company will take back your complete bonus and will start your coverage from the scratch.
Having said that, now that you are well aware of the grace period, its significance, and disadvantages of not paying renewal premium on time, make sure you don’t delay paying your health insurance renewal premium.
How You Can Avoid Lapse of Your Health Insurance Policy?
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Want to renew your health insurance policy online right away? Here are the steps you need to know - Renewing your health insurance policy-All you need to know!
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