The grace period is the time allowed to policyholders to renew their insurance plans in case they happen to have missed their renewal date. Most of the health insurance service providers allow their customers a prefixed period of time to renew their health insurance plans, failing to do which the policy would get lapsed.
There are reasonable aspects pertaining to a grace period in health insurance that policyholders must be aware of. Let us understand more about them.
Things To Remember- Grace Period in Health Insurance Plans
To get complete benefits of your health insurance plan, payment of premium on time is very imperative. However, the grace period extended by insurance service providers is that provision that keeps you from losing out on your insurance coverage in case the renewal date has been missed.
The points given below recapitulate on some of the key points of a grace period in health insurance:
No coverage during the grace period
Policy coverage is not extended to the insured during the grace period. In case insured missed the date of renewal, (s)he is stripped off any health insurance coverage until the renewal of the policy within the grace period. Simply put, the policyholder will not be covered during the grace period.
Policyholders often confuse grace period with the waiting period. It is the pre-defined number of days that the policyholder has to wait before he/she can start reaping the benefits of health insurance coverage. Unless the waiting period is done with, policyholders cannot make a claim. The waiting period re-starts in case the renewal payment is not made on time. The insured will also lose out on all continuity benefits once the renewal date is missed.
Possibility of Denial
Missing the renewal date comes with the possibility of denial of renewal of health insurance plan by your insurer. The insurer may refuse to renew your health insurance, which will leave you without any insurance coverage until you buy a new one.
No Coverage for Pre-existing Diseases
Once you miss your health insurance renewal date, you will no longer have any coverage for pre-existing diseases. It is only after you renew your health insurance plan during the grace period and go through the waiting period; you will be eligible to receive coverage against pre-existing diseases.
If the policyholder manages to renew the policy within the grace period, he will not lose out on the No-Claim Bonus. It is, therefore, essential to renew your policy on the date of renewal or renew it during the grace period to avoid cancellation of the accumulated No-Claim Bonus.
Renewal of Health Insurance Plans during the Grace Period
The duration of the grace period in health insurance varies from one insurance service provider to another. Also, the policy you are covered under also decides the grace period. The grace period for health insurance plans is mentioned in policy contracts. Generally, the grace period varies from 15 to 30 days. The policyholder is required to renew the insurance plan within the stated grace period to keep the health insurance coverage continued.
Failure to Renew the Plan during the Grace Period
There are certain repercussions of non-renewal of health insurance plan within the grace period. Your medical insurance plan gets cancelled and you are stripped off all health coverage. Any emergency hospitalization and treatment must be funded out of the pocket unless you purchase another medical insurance coverage. You can always consider buying a new health insurance plan from a different insurer. However, there is a chance that you would be refused coverage by other insurance service providers due to your history of non-payment of insurance premium.
Once the policy lapses, you will have to undergo medical screening to buy a health insurance plan over again. In the process, you also might have to pay a higher premium towards your new health insurance plan.
Considering the drawbacks of later renewal of insurance, it is best not to delay renewal of health insurance plan even if you have a considerable grace period. It is only wise to keep track of the date of renewal and pay premiums on time to avoid a policy lapse.