Home»Blog»Health Insurance»What is Grace Period In Health Insurance And How To Revive Your Health Insurance In The Grace Period?
What is Grace Period In Health Insurance And How To Revive Your Health Insurance In The Grace Period?
19 July 2022
A health insurance policy is the best way to financially protect yourself and your family during a medical emergency. Paying the health insurance premiums helps ensure that you and your loved ones get the correct treatment at the right time. But what could happen if the date for paying the premium is past due? Thanks to the grace period in health insurance, you can pay the premium and revive the insurance policy.
Read on to understand what is the grace period, how it works, the difference between the grace period and the waiting period and other details.
What is the Grace Period?
The grace period is the extra time an insurance company gives a policyholder to pay their premium after the original due date but before the policy is cancelled.
The grace period can be different depending on the insurer and the type of policy. The terms and conditions of the policy spell out this time frame, which is usually between 15 and 30 days. To ensure you don’t miss the deadline for paying the premium, you must read the policy’s terms.
The terms and conditions also say if the “NCB,” or “No Claim Bonus,” is still in effect during the grace period and if claims will be paid even if the premium hasn’t been paid.
What is the Grace Period in Health Insurance?
Every health insurance plan has an allotted amount of time before it needs to be renewed on a specified day. When you pay a specific sum to ensure that the coverage is continued, that is the policy’s renewal date.
The grace period in health insurance means the number of days policyholders have after the renewal date to pay their premium if they didn’t pay it on time.
There are several reasons why the policyholders might not renew the policy by the due date. Because of this, insurers offer a grace period for health insurance as extra time for the benefit of the policyholder. They can keep their policy even if they can’t pay by the due date.
The policyholder can still use the plan’s benefits as long as the coverage is still in effect at the end of the medical insurance grace period.
A grace period in health insurance normally lasts 15 to 30 days. It is best to confirm with the insurance provider to avoid any misconceptions. The grace period for health insurance can last for different amounts of time, depending on the insurer and the type of coverage.
But the policy may end if you don’t pay the premium within the grace period for renewing your health insurance. To avoid having to choose coverage all over again, you need to renew your health insurance policy before or during the grace period.
Let’s check an example of how the grace period in health insurance works to help us better understand how it works.
Mr. Ahuja’s health insurance is set to run out on September 5, but he doesn’t pay on time because of personal issues.
His insurer provides a 30-day grace period for health insurance.
His plan won’t expire until October 5, so he has time to pay the renewal fee.
But if he doesn’t renew the policy by this added deadline, he will no longer have access to health insurance.
Renewal of Your Health Insurance Plans During the Grace Period
Knowing how the grace period works in the industry is important when looking for health insurance for yourself or your family. If you aren’t careful, you might forget when the next renewal is, which can cause problems. Also, the need to have health insurance is getting more and more important as time goes on.
IRDAI has given several rules about the grace period that health insurance plans offer. In the case of health insurance, you must renew your coverage during the grace period, even if you haven’t filed any claims during the policy term.
Moreover, as the policyholder, keep the important dates of your insurance policy in mind. Set a reminder, if required The company that gives you health insurance may send you a reminder about the renewal date or information about the grace period.
How to Revive or Renew a Lapsed Health Insurance Policy?
There are two situations: the first is when the premium was not paid by the due date; the second is when the premium was not paid by the grace period. The insurance can be revived within the time frame outlined in the policy agreement, but you will be required to pay the total amount of unpaid premiums, penalties, and interest. Some insurance companies provide plans to renew expired health insurance with a deadline to take advantage of them.
However, if you wish to renew your health insurance coverage that has already expired but still has time left to do so, you can do so both online and offline. To renew the expired or lapsed health insurance policy, follow these steps:
Step 1: Access the insurance provider’s website to make an online payment.
Step 2: Access your account by logging in.
Step 3: Select the option to pay the premium, send the money, and get the insurance policy sent to your email address on file.
Differences Between Waiting Period and Grace Period
It is applicable only once health insurance coverage is completely
It is applicable only under specific circumstances, such as pregnancy, critical sickness, pre-existing problems, etc.
There are between 24 and 30 days left
A lengthier time of three to four years
There is a fine or late charge
No fine or late payment
The insurance company will deny every claim for every type of treatment
Claim approval is subject to a few specified circumstances
What Problems Could you Face if the Grace Period Ends?
When you get health insurance, you can determine the premium. When your health insurance policy term ends, you can continue to get the same benefits if you renew your coverage either before or during the grace period. However, if you don’t, you could be in the following situations:
No Coverage Benefits: If you fail to pay the renewal premium during the grace period for your medical insurance, you will not have coverage until the renewal process has been completed. After a health insurance coverage’s grace period has passed, all claims against the policy are regarded invalid.
Waiting Period: If you don’t renew your policy of health insurance during the grace period, you run the risk of having to start your coverage all over again. If you do so, the new plan will immediately put you into a waiting period before you are eligible to make any claims. If you do not renew the policy on time, you run the risk of losing out on any continuity advantages that may be available.
Termination of Previously Coverage: If you miss the day on which your insurance is due to be renewed, you run the risk of losing coverage for any pre-existing medical issues you may have. Because you will be a new client, the conditions of the policy provide that there will be a waiting period during which you will not be eligible for any benefits.
Forfeiture of the No-Claim Bonus: The policyholder is eligible for a no-claim bonus if they make it through the entire policy term without filing any claims for reimbursement. If you do not renew your health insurance policy during the grace period allotted for doing so, you risk losing your coverage.
Increased Expenses Involved in Renewal: If you don’t renew your health insurance policy during the grace period, you will be subject to paying a higher premium. This is one of the major downsides. If the insurance is cancelled, you might be required to purchase a new one, but you won’t be eligible for any savings or the continuation of benefits from the old one. In addition, as the expense of providing medical treatment continues to climb, so does the premium that you must pay for health insurance.
Renewal May Be Denied: If you wind up having to buy a new plan because you missed the grace period for health insurance, there is an increased chance that your application will be denied. To get an accurate estimate of your health insurance coverage, you will need to submit a medical exam before buying a plan. Consequently, if you have recently established a medical problem, the premiums for the new insurance may be significantly higher.
Grace period in health insurance helps renew the health insurance policy in case you miss paying the premium within the due date. But, it is advisable to always pay your premiums on time after acquiring a health insurance policy within the grace period to keep receiving coverage advantages. As you age, having health insurance is essential. It could be difficult for you to obtain new health insurance if you have pre-existing diseases. Pay all of your premiums on time to stay protected from numerous diseases.
FAQs on Grace Period in Health Insurance
Q1. If I have filed claims over the preceding policy years, will the insurance company allow me to renew the policy?
Ans: A policy renewal cannot be refused based on a claim or claims made during the policy years before the one being renewed, as stated in the rules issued by the IRDAI.
Q2. When a request to renew health insurance could result in a denial of coverage.
Ans: In most cases, it is permissible to renew one’s health insurance policy, except for situations in which the insured person has committed fraud, moral hazard, or misrepresentation.
Q3. Do I Get Reminders to Renew My Health Insurance?
Ans: Yes, you will receive renewal reminders. The health insurance provider may make an effort to notify the policyholder of the upcoming renewal date of the health insurance policy, but they are not required to do so.
Q4. What will happen if I cannot renew my plan during the grace period allotted for health insurance?
Ans: If you do not pay your health insurance premium within the grace period for the renewal of your Mediclaim policy, you may be dropped from coverage, and the plan may become invalid. If you purchase a new health plan, you will not be eligible for a no-claim incentive in the future. Additionally, the price of acquiring an alternative health insurance plan may be higher than it was previously.
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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