What is the Grace Period in Health Insurance Plans?
Grace period for a health insurance policy is an extra period of time given to policyholders by the insurance companies for paying their premiums at the time of renewals without incurring a late fee or being dropped from the benefits of existing health insurance plan.
This means that even if a person misses a payment due to unforeseen circumstances, they will not immediately lose their coverage. There are several reasons why a grace period is important, as it can help individuals access the care they need without having to worry about losing their coverage.
What is the grace period offered by health insurance companies?
You can buy a health Insurance policy for a tenure of one year to three years as per choice. However, after the policy tenure expires, you would have to renew your policy to continue getting the insurance coverage.
Now suppose due to a financial situation or for any reason, you couldn’t stay up-to-date with the payments of your health insurance premiums, then should your existing policy get cancelled?
No, you get a grace period of typically 30 days, depending on company to company, to make the payment of your missed premium. During this time, the insurer does not cancel your health insurance policy and you can retain the same policy benefits after the premiums are paid. It is important to note that your claims shall not be approved during the grace period.
What are the benefits you could lose on not renewing the policy even in grace period?
An unexpected expense or a sudden change in finances can prevent an insured from making their payment on time. By giving customers the grace period, insurers take into account these possibilities and provide an extra leeway for policyholders to pay their premiums.
The grace period for health insurance is like a lifeline and must be used as such. Below are some essential benefits you would lose if you fail to renew the health insurance even in the grace period:
You lose your health cover:
Once your policy is lapsed, you lose the health cover and have to bear the medical expenses during an emergency by yourself. Even if you plan to buy a new health insurance policy at a later date, you would not be covered for certain diseases until the waiting period of 2-4 years is achieved. As the cost for medical treatments in today’s time is huge, it is wise not to let your health insurance policy lapse.
You lose the No-claim bonus:
One of the most important benefits of getting a grace period for your health insurance policy is that you can pay the premiums and get your policy renewed without losing the no-claim bonuses accumulated over the years and you continue to receive the discounts on premiums as per the no-claim bonus you have. However, if you fail to pay the premiums even during the grace period and eventually if the policy gets lapsed, then your no-claim bonuses accrued will also be lost.
You cannot port your policy to an another insurer:
It usually takes 45-60 days for porting of your health insurance policy from the current insurer to a new health insurance company. However, the porting of policy is allowed only if it is active. In other words, your new insurer would reject your porting request if the old health insurance plan has expired.
Your policy could get cancelled on frequent delays:
The grace period should not be an excuse for not paying your health insurance premiums on time. Most insurers will look at the frequency of late payments – if you’re a frequently late payer, your insurer is likely to cancel your policy. And even if you don’t get cancelled, the cost of premiums may be increased or the sum assured could be reduced over time. Hence, it is best to pay your premium on time to avoid any of these complications.
Purchasing a new policy can be expensive:
If your existing health insurance policy expires and in future you plan to buy a new health insurance plan then the premiums may be expensive as health insurance premiums are rising due to high medical inflation.
Conclusion:
The grace period serves as a reminder for individuals about the importance of making their payments on time. If someone has missed a payment, the health insurance companies first send them a notification letting them know that their payment is due and that the grace period will soon end. This helps individuals remember to make their payments on time and avoid losing their coverage due to non-payment.
To sum up, the grace period in health insurance is an important concept, as it provides individuals with time and flexibility to make payments for their insurance policy. It serves as a reminder to make payments on time. By understanding and utilising the grace period, individuals can ensure that they do not lose their coverage due to non-payment on their health insurance plan.
