FOR EXISTING POLICY
FOR NEW POLICY
Grace periods are a specific time frame within which you must make your premium payments or renew your policy. This time frame is set by the insurance company, and it will also depend on the policy you buy. Generally, health insurance grace periods last 15 - 30 days.
Health insurance and life insurance plans in India usually come with a grace period. Grace periods in health and life insurance plans are offered in insurance to ensure you pay your policy premiums@ on time. They also apply to policy renewals. Failing to make your payments within the grace period can result in your policy lapsing.
Here, we will focus on grace periods for a health insurance plan. Checking the health policy’s grace period is vital when buying health insurance, as making your payments on time ensures you stay covered against medical emergencies. Read on to learn more about how grace periods work and how you can avoid a policy lapse.
What is a Medical Insurance Grace Period?
A medical insurance grace period is the extra time your insurance provider gives you to pay your premiums after the policy’s payment due date. The grace period for health insurance is usually 15 - 30 days from the due date.
Not all health insurers will offer a grace period, so you must check whether your policy offers one before purchase. You can find your health policy’s grace period mentioned in your insurance policy contract, i.e. the policy wordings of your purchased health plan.
How Does the Grace Period for Medical Insurance Work?
A grace period under medical insurance gives you a chance to retain your health policy’s validity in case you are unable to pay your premiums within the due date. This way, your policy coverage does not lapse if you fail to pay your premiums.
However, your policy coverage will lapse if you still do not pay your premiums within the grace period. You can revive your policy by contacting your insurer and requesting a reinstatement.
If this is the case, you will need to pay all outstanding premiums or fees that are due, and your insurer may even require you to pay a reinstatement fee.
This process will differ across insurers. Hence, It is important to carefully review your policy terms before requesting a reinstatement, as you can be subject to certain conditions or restrictions that can impact your policy revival/reinstatement.
Revivals and reinstatements can get expensive. Instead, it is highly recommended to check your health policy grace periods and make your payments/renewals on time.
What is the Grace Period for the Renewal of Health Insurance?
Like grace periods for premiums, health insurers also offer a health insurance renewal grace period for health insurance policy renewals. The grace period for renewal of health insurance is also 15 - 30 days, depending on the insurer.
What Happens if I Do Not Renew My Medical Insurance Policy Within the Grace Period?
- Failure to renew your health policy within this time will result in your policy lapsing. This means you will have to purchase a new medical insurance plan and go through the application process all over again.
Moreover, it can result in a new underwriting process, which could change your policy premiums or minimum coverage amount.
- If you have accrued bonuses or discounts like a No Claim Bonus (NCB) under your policy, they will lapse along with the policy.
- You will also have to go through the 2 to 4 years waiting period all over again for critical illness coverage and other covers. This is a huge drawback and will not be adjusted even if you have completed the waiting period under your previous/lapsed policy.
Is a Medical Insurance Grace Period and Waiting Period the Same?
No, they both refer to different things. A grace period is an extra number of days granted after your premium payment due date to pay your policy premiums/renewal premium.
A waiting period refers to a fixed period - usually a certain number of months/years that you must “wait out” until you can get medical coverage. Certain base policy coverage, like critical illness and maternity coverage, have waiting periods of 2 - 4 years.
You can only get coverage for these conditions after you have completed your waiting period.
For example, your policy renewal premium is due on 1st May 2023, and your policy has a 30-day grace period. It also offers critical illness coverage after a 2-year waiting period.
- If you renew your policy on 31st May 2023, your policy will still be valid and in effect. However, your policy will lapse if you fail to renew/pay before 1st April 2023.
- You will also only get coverage for a critical illness listed under your policy if you have held your health insurance plan for 3 consecutive years under the insurer. So, if your policy lapses due to a cancellation or lack of payment, you will need to start from scratch with a new policy.
Conclusion
Health insurance grace periods are vital in retaining your medical insurance coverage. Without them, your policy can lapse if you miss even a single payment. To ensure you do not miss out on your premium payments, consider opting for an auto-debit feature if your insurer offers it.
Your premiums will be automatically transferred from your account on the due date. Otherwise, you can also try opting for an annual payment option so you do not have to stress over monthly payments.
