What is the Grace Period in Health Insurance Plans?
In case the insured misses the due date to pay the premium for a particular health insurance plan, then the insurance company offers a grace period of let's say 15 days. If the insured pays the premium during this period, the policy will not lapse.
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Grace period in health insurance is that time or the number of days that an insured can take to pay the premium for the health insurance policy he/she is covered under. Even after the due date is over. Usually, insurance companies offer a grace period of 15 days after the due date during which the insured can pay the renewal amount. But some insurance companies also offer a grace period of 30 days for the same. In case the insured is unable to pay the health insurance premium even during the grace period, then then the insurance company holds the right to reject the health insurance renewal application even if the customer wants to pay the premium then. Another thing to note is that the insured cannot avail coverage benefits during the grace period. Also, for some specific illnesses, as listed in the policy document, the grace period will restart again, and hence it is necessary to pay the health insurance premium on time.
Timely renewing a health insurance policy ensures a seamless process in a health emergency arises, that requires unplanned hospitalisation. So, to avoid unnecessary hassles, it is recommended to pay a health insurance premium within the due date and not wait for the grace period.
How Does Grace Period in Health Insurance Work?
To continue availing the coverage benefits under your health insurance policy, it is important to pay all the outstanding health insurance premiums during the grace period. Grace period is given by the insurance companies so that the insured does not miss out on paying the premium even if they have forgotten the due date. For instance, your health insurance policy expired on 10 August 2020 and you missed the due date to pay the health insurance premium. Then the insurance company will provide a grace period of 15 days to pay the premium. Hence, the extended due date will be 25 August 2020, i.e. is the last date to pay the premium in order to continue availing coverage benefits.
Now that if you are not able to pay health insurance premium even in the grace period, and if the policy lapses, then you will lose any accumulated benefits such as the No Claim Bonus and waiting period benefits. These will become invalid and you will again have to earn them in case you buy a new health insurance policy.
How to Renew/Revive Expired Health Insurance Policy?
There can be two situations. One can be where you have not paid the premium within the due date and second where you do not have to pay the premium within the grace period. In the first case, you are required to pay the required premium as well as some interest and penalties within the stipulated time, to be able to revive the policy. But if you want to renew your expired health insurance policy, that still has a grace period for renewal, then there are two ways to do so online and offline. For the offline process, you must talk to your insurance company over call. Whereas for online process, you must follow the steps given below to renew your lapsed health insurance policy online:
- Visit the website of InsuranceDekho to make online payment.
- Login to access your account
- Choose the mode of payment and pay the required health insurance premium.
- You will receive the policy document at your registered Email ID.
Disadvantages of Not Making the Renewal Payment on Time
When it comes to health insurance, there are certain drawbacks of not making timely renewal payments. These are explained below:
- No Coverage Benefits: If you fail to pay health insurance premium for a particular policy, then naturally you would not be allowed to avail any coverage benefits under it. Even if you make a claim, then it will be considered invalid. A situation like these may cause trouble in case of an emergency situation.
- Loss of Pre-Existing Coverage: Many insurance companies come with health insurance plans that have waiting periods for pre-existing diseases. In case you fail to pay the premium within the stipulated time, then you will be required to complete the waiting period again according to the terms and conditions of the policy.
- Loss of Critical illness Coverage: Like pre-existing diseases, you are also required to complete a waiting period for critical illnesses, in most health insurance plans. But if you are unable to pay the required health insurance premium on time for a particular policy, then you will be required to complete the waiting period again. Also, you will not be able to make any claim during that time.
- Loss of No Claim Bonus (NCB): No Claim Bonus is the benefit that the insurance company provides you for not making any claim during the policy period. Like waiting period benefits, you may also lose the No Claim Bonus (NCB) benefits by not renewing the policy on time.
- Lapse of Medical Check-Ups: Some insurance companies offer medical check-ups on completion of a specific waiting period. But if you do not pay the premium on time, then you may lose the medical check-up benefits and will have to wait until the insurance company offers it again.
- It is Expensive to Renew a Lapsed Health Insurance Policy: Once your health insurance policy is lapsed, then you will have to buy a new health insurance policy. Not only you lose the NCB and waiting period benefits, but will lose discounts etc as well. This will lead you to paying a higher premium in case you buy a new health insurance policy.
- Loss of Portability: You can change your existing health insurance policy by switching from one health insurance company to another insurance company. But in case you have not renewed your policy on time, then you will lose the portability benefits as well.
Premium Payment During Grace Period
If you have missed your premium payment due date, and decide to pay it during the grace period, then some insurance companies may charge you a late fee. And if you are one of those who frequently miss their health insurance policy renewal dates, then the insurance companies may charge you a higher premium at the time of policy renewal.
What Happens If You Fail To Pay the Premium During Grace Period?
If you fail to pay the health insurance premium during the grace period, then your policy may be cancelled and you will lose the accumulated benefits such as waiting period benefits, No Claim Bonus, etc. During this period, even if you face any health emergency, you would not be able to make a claim for the same. Hence, you will be required to pay for the expenses incurred, out of your own pocket.
In this case, you can buy a new health insurance policy from another insurance company. There are chances that another company also refuses your insurance coverage considering your past record of not paying the health insurance premiums on time. Also, in case of a lapsed policy, some insurance companies may ask you to undergo a pre-medical screening before policy issuance. It increases the chances of coverage being denied or being charged a higher premium.
How Can Grace Periods Affect Claims?
Health insurance companies offer extensions for premium payment to the policyholders to ensure that the coverage remains intact even if the premium is paid late. During this time, the policyholders can still file a claim in case a medical emergency arises. But if the renewal date is missed, then the insurance company may deny you coverage due to non-payment of premium. You would not be able to avail of any coverage benefit in this case, even if you pay the premium the very next day.
For example, you were not able to pay the health insurance premium on time, and also your grace period, and if a health emergency arises, which requires hospitalisation and expensive treatment. Then the insurance company will not cover you for the expenses incurred due to hospitalisation as the policy lapsed and you are not insured.
Not only this, the insurance company will not offer any coverage until the treatment is over. In this case, the only option is to buy an insurance policy with another insurance company at a high premium and start over with new terms and conditions as well as waiting periods.
The aforementioned example shows that paying health insurance premiums late can cause inconvenience and can cost you a lot. So, ensure that you pay the health insurance premium on time so that the coverage is not put at risk. Do not wait for the grace period until and unless there is an emergency.
Thus, the next time, you must make sure to pay your health insurance policy renewal premium to continue availing of coverage benefits. As we age, health insurance coverage also increases. And in case you are suffering from any pre-existing conditions, then you may not easily get a new health insurance policy. Therefore, it is recommended to timely pay your health insurance premium and stay covered at all times.
Is Grace Period Different From Waiting period?
There is little difference between the grace period and waiting period in health insurance. To understand the difference, refer to the table below:
Applicable to complete health insurance coverage
Applicable only in specific conditions like critical illness, maternity, pre-existing illnesses, etc.
A short period of 24 hours to 30 days
A longer period for up to 3-4 years. It varies from one insurance company to another.
Late fee or penalty may be applicable
There is no penalty or late fee applied
The insurance company might reject the claims for all types of treatment
Claims are approved for treatment other than the specific conditions like maternity, pre-existing conditions, etc.
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