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What is the Grace Period in Health Insurance Plans?

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To keep a health insurance policy active and to continue receiving insurance benefits, it must be renewed on a regular basis. The insured would be required to pay a premium in accordance with the terms and conditions of the policy to maintain the policy’s validity. If a person’s insurance policy is not renewed, it will expire, and they will not be able to file any claims.

For people unable to renew the policy on time, insurance firms have developed a “grace period.” In health insurance plans, the grace period is the number of additional days the policyholder has after the renewal date to pay the premium. Depending on the insurance provider and the type of coverage a person owns, the grace period’s duration can vary.

What is Grace Period in Health Insurance?

The grace period is the amount of time an insured person has to pay the premium for the health insurance plan that covers them after the due date has expired. According to the insurance company policy, the insured typically has 15 days beyond the due date to pay the renewal amount. However, some of the best health insurance plans in India include a 30-day grace period for paying the premium, which is an additional benefit to the insured.

The insurance company has the right to deny the application for health insurance renewal if the insured is not able to pay the premium even during the grace period but is able to pay at a later time. Therefore, it is imperative to pay the health insurance premium on time.

Maintaining active health insurance is crucial to ensuring a smooth process in the event of unexpected hospitalization. To avoid unnecessary hassles and to make use of the benefits of the best health insurance policy, make sure you pay the premium before the due date and do not rely on the grace period.

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How Does Grace Period Work?

To prevent your health insurance coverage from expiring, you must pay all past-due premiums during the grace period. Insurance companies offer a grace period so that even if you forget the due date, you do not forfeit paying the premium. For example:

Say you purchased health insurance from the best health insurance company in India on 11 June 2019, and your health insurance policy expires on 10 June 2020, and you failed to pay the required insurance premium by the deadline.

  • You have 15 days to complete the payment after receiving a grace period from the insurance company.
  • The final day to pay the premium to keep receiving the coverage is 25 June 2020, the extended due date.

Note that the insurer will reject any claims made during the grace period if the premium is not paid within the grace period. Additionally, any earned No-claim-bonus (NCB), exclusions and waiting periods for pre-existing illnesses will become worthless after the grace period expires.

Renewing Your Health Insurance Plans During the Grace Period:

Grace periods for renewing a health insurance plan may vary depending on the type of coverage and the insurance company. The duration of this might range from 24 hours to 30 days.

Additionally, your insurance company can impose a penalty if you pay the premium before the grace period expires. If you want to keep your coverage and continue enjoying the benefits of the best health insurance plan, you must renew your insurance policy during the grace period.

Is Waiting Period the Same As Grace Period?

No. The waiting period is when you can’t make any claims against existing illnesses to avail of the benefits. The waiting period may generally last three to four years and is longer than the grace period.

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The grace period is for the renewal of the policy. It is applicable to the entire health insurance policy, not just some serious conditions. Depending on the insurer and plan type, the grace period for renewing the insurance policy can extend anywhere from 15 to 30 days.

Major Implications of Missing the Renewal Payment Deadline:

There are a few drawbacks If you don’t pay your renewal premiums on time. They are,

1) No Coverage Benefits:

Since you have not paid the premium, the coverage is void until you do, and any claims made during that time are deemed invalid.

2) Loss of Pre-Existing Coverage:

Some insurance companies invalidate or do not allow for the inclusion of pre-existing illnesses. According to the policy’s terms and conditions, you might need to go through the waiting period again.

 3) Waiting Period for Serious Illness:

There is a waiting period before you receive treatment for some critical illnesses, such as cancer and heart problems. Some insurance providers will withdraw the inclusion, and you may have to wait again before receiving coverage for such serious illnesses.

4) Loss of No Claim Bonus (NCB):

Every health insurance plan comes with a discount or bonus for not filing any claims throughout the policy period. You lose this discount/bonus if you don’t renew the policy.

5) Lapse of Medical Checkups:

After the required waiting period has passed, several insurers offer medical check-ups. You risk losing your right to the medical check-up benefit if you let your health insurance lapse and don’t pay the renewal premium. You will have to wait until it is given again.

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6) It Costs a Lot to Renew a Lapsed Health Insurance:

Since the policy expires, you may have to get a new insurance policy. Along with losing the policy, you also forfeit any NCB you may have accrued. Hence, you lose the discount when you buy new health insurance, which results in a higher premium.

7) Loss of Portability:

You have the choice to switch health insurance companies by transferring your current policy to the new insurer. The option to migrate the policy to a better and the best health insurance in India is lost when the current policy expires due to not paying the premium on time.

The Bottom Line:

Health insurance companies make sure you have adequate time to pay the renewal premium. They achieve this by providing an extension of the due date, known as a grace period. However, the health insurance policy may expire if you don’t pay the premium within the grace period. Hence, it is essential to renew the policy before or during the grace period to avoid the hassle of choosing a policy all over again.

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