What Is The Grace Period In Health Insurance Policies?
Arkaprabha (22-years-old) has started his career by joining an MNC. Arkaprabha wants to purchase the best health insurance policy so that he can stay protected against various diseases from the beginning. But before purchasing a policy, he wants to uplift his knowledge regarding the terms related to health insurance plans. After his research, he came to know that the health insurance grace period plays a pivotal role in purchase making decisions. The grace period is the additional time or the number of days that an insured person gets to pay premiums for the health insurance policy during the coverage period.
In this article, we are going to illustrate more about the healthcare grace period so that novice buyers like Arkaprabha will purchase the best policy wisely.
What is the Grace Period in Insurance?
The grace period is the extra time that is given to you by your health insurer if you miss your policy renewal after the due date. Most insurance companies offer a grace period of 15 days after the due date. During this period, you must renew your policy else the insurance company has every right to cancel your policy. Some insurers also offer a grace period of 30 days for the same. Almost all health insurance policies embrace the customers with a grace period. But you must remember that as a policyholder, you can’t enjoy the coverage benefits during the grace period.
How Does the Grace Period in Health Insurance Work?
If you want to enjoy the coverage benefits against your health insurance policy, you should pay the outstanding premiums during the grace period. Grace time meaning is the additional time offered by insurance companies so that the insured person doesn’t forget to pay the premium even if he/she failed to pay it within the due date. For instance, your purchased health insurance policy will be expired on 10th May 2022 and you forget to pay the premium within this date. Then your health insurer will offer a grace period of 15 days so that you can pay your premium comfortably. So, the extended due date will be 25th May 2022. Within this period, you should clear your health insurance premiums to avail yourself of the coverage benefits.
If you fail to pay your health insurance premium even in the grace period, then your policy will lapse. You will miss all accumulated benefits including No Claim Bonus and waiting period benefits. All these benefits will be lost and you need to purchase a new policy to earn these benefits.
What Happens if You Can’t Pay Your Premium During the Grace Period?
If you can’t pay your health premiums during the grace period, then your policy may be canceled. You are no longer eligible to enjoy benefits like waiting period benefits, No Claim Bonuses, etc. If you meet any medical contingency during this period, you can’t initiate any claim from your insurance company. Thus, you need to bear all the expenses from your end.
You can purchase a new health policy from another insurance provider. But this new company may reject your insurance coverage after evaluating your record of not clearing the health insurance premiums on time. If you want to revive your lapsed policy, some insurers may ask you to perform a pre-medical test before the issuance of the policy. Your claims may get rejected or you need to pay a higher premium for this.
How Can Grace Periods Affect Claims?
Health insurance companies often welcome policyholders with an extension for premium payment. This ensures that they still get coverage even if they pay the premiums late. In case of a healthcare emergency, the policyholder can initiate a claim. But if you miss the renewal date, then the insurer may decline your coverage due to a non-payment issue of premium. You can’t get any coverage benefit in this scenario, even if you pay your outstanding premium the very next day.
For example, if you didn’t pay your health insurance premium during the grace period and you meet a health emergency which requires hospitalization, then what would be the next? The treatment cost is also expensive and you can’t afford it from your side. Unfortunately, the insurer will not reimburse your hospitalization expenses as your policy got lapsed and you are no more covered under the plan.
In this scenario, the only option is you should buy a new policy from another insurance company by paying a higher premium. You need to start from the base with all terms and conditions like the waiting periods and all. To avoid all these hassles, you should pay your premium on time. Don’t wait even for the grace period until there is an emergency.
What is the Difference Between the Grace Period and the Waiting Period?
|Grace period||Waiting period|
|Applicable only after the completion of health insurance coverage||Applicable only in certain conditions like critical illness, maternity, pre-existing illnesses, etc.|
|The time is between 24 hours to 30 days||A longer period between 3 to 4 years|
|A penalty or late fee is applicable||No penalty or late fee|
|The insurer will reject all the claims for all types of treatment||Claims are approved apart from some specific conditions|
While purchasing a health insurance policy, always renew your premiums on time to continue availing of coverage benefits. Health insurance coverage is imperative as you grow older. If you are having pre-existing conditions, then it could be an arduous job for you to get a new health insurance policy. So, timely pay all your premiums and stay protected against various diseases.