What is the Grace Period in Health Insurance Plans?

Your health insurance grace period is the extra time that you are given in case you miss your renewal premium due date. Failure to payment in the grace period can lead to your mediclaim policy cancellation or even penalties. You get a fair chance to pay the premium in case you are not able to make the payment due to some circumstances. Most of the insurance companies offer a grace period of 15 days for payment of medical insurance renewal payments. And there are some insurers who will offer a grace period of 30 days.

However, the duration of the grace periods will vary depending on the type of insurance company and the type of mediclaim policy. And it is not necessary that every health insurance company will provide the benefit of grace period. For instance, the HDFC ERGO Health (formerly known as Apollo Munich) grace period might differ from New India Assurance and others. It can even be the same. Therefore, you would need to check with the insurer or in your policy wordings to see if there is a grace period before policy renewal or not.

Also, note that your health insurance grace period differs from the insurance waiting period. In the waiting period, you need to wait for certain duration before you can file a health insurance claim. Whereas, the grace period as mentioned above is defined as the number of days that you get to pay your health insurance renewal premium even after your due date has passed.

For instance, if your mediclaim policy renewal premium is due on January 01, 2020, and your grace period is till 31^st January to pay your premium. And if you fail to make the payment then your insurer can deny your renewal request even if you want to make the payment.

To enjoy health insurance coverage benefits make sure that you do not delay your policy renewal. Do not wait for the grace period, in fact, renew your policy much before that.

Below are some of the drawbacks of not renewing your policy on time:

1. No Coverage benefits in the grace period – Because you have not paid the premium on time, you will not be able to avail coverage benefits or file a claim during the grace period.
2. Renewal can be denied – The Insurer can choose not to renew your health insurance policy and you will have to buy a new plan. It will lead to loss of coverage benefits until renewal.
3. Waiting Periods – Your waiting period for any health condition or specific illness will now re-start and your continuity benefits will also be lost.  
4. Pre-existing Diseases will not be covered – As you will be a new customer you will have to wait to go through the insurance waiting period. After the completion of the waiting period, only your pre-existing diseases will be covered.

Paying During the Grace Period

In case you miss your due premium and pay during the grace period, some health insurance companies might charge a late fee. In cases where policy holders frequently miss there renewal dates, the insurers might charge them a higher premium on renewal.

Failure to Pay the Premium within the Grace Period

If you fail to pay the premium amount within the grace period, your mediclaim may be canceled for non-payment. In that case, you won't be able to avail coverage benefits if there is any health emergency or hospitalization. However, you can buy a policy from other insurer, but in the worst case scenario, you might be refused coverage from other insurers based on your past records.

If your policy lapses some health insurers would need you to undergo pre-medical screening before issuing the mediclaim policy. It puts you at a greater risk of coverage being denied or being charged a higher premium for a new policy.

How Grace Periods Can Affect Your Mediclaim?

Health insurers offer extension with grace period to ensure that your health coverage remains intact even if you pay late. You can still file mediclaim in case of any health emergency. In absence of grace period or upon missing your renewal date, your insurer can deny coverage for a late payment and you won’t be able to file any claim even if you make the payment the next day.

For instance, say you missed paying your health insurance premium on time and you also miss your grace period. Then a health emergency arises that requires hospitalization and expensive treatment. And your health insurance provider canceled your mediclaim for non-payment. Not only that, the insurer refuses coverage until the treatment is over. In that case, the only option that you have is buying a health insurance policy at an exorbitant premium and starting over with the other terms and conditions that may apply.  

With the above example, you can see how a late premium payment and failure to policy renewal can cause your inconvenience and can cost you a bomb. So, make sure that you renew your mediclaim policy on time if you do not want to put your coverage at risk. Even if there is a grace period do not delay it until there is an emergency.

In a Nutshell

So make sure that next time you pay your policy renewal premium on time to enjoy continuous coverage benefits. Because with age your health issues also increase and if you have any pre-existing condition, buying a new health plan will not be easy. And you will have to start all over again.