In medical insurance, grace period is an extension provided to pay your policy premium. It is typically a few days after the policy renewal due date.
Here, we will elaborate on what grace period is in health insurance and how it works.
What is grace period in health insurance?
Your medical/health insurance grace period is the extra time you get if you missed paying your renewal premium by the due date.
Failure to make the payment even after the grace period can result in your mediclaim policy cancellation or claim denial (if the claim is made after the renewal date). Most health insurance plans come offer a grace period of 15-30 days.
What is grace period?
A grace period grants you extra time to pay your medical insurance premium in case you aren’t capable of making the payment within the due date owing to an unforeseen situation.
How does grace period in health insurance work?
Many insurers provide a grace period of 15 days for the payment of health insurance renewal premiums. However, there are also different insurance companies that provide a grace period of 30 days.
The period of grace duration can vary depending on the insurer and the sort of healthcare coverage you purchase. Furthermore, it isn’t mandatory for each insurance provider to offer the advantage of a grace period.
During this time:
- Your policy remains technically in force.
- You can make the payment without additional paperwork.
- If you fail to pay by the end of the grace period, the policy lapses and all benefits, including waiting periods and accumulated bonuses, may be lost.
Therefore, talking to your insurer and clarifying doubts is better than losing out on any benefits because of being in the dark. Read the fine print of your policy wording to see if a grace period is offered. The length of this period would also be mentioned in the policy wording.
Features of grace period in health insurance
Here are some key features that define how the grace period works:
- Duration: Generally ranges between 15 to 30 days, depending on the insurer.
- Policy continuity: If the premium is paid within this period, the policy continues without any breaks.
- No medical test required: You don't usually need to undergo a new medical check-up for renewal during the grace period.
- Premium amount remains the same: The payable premium during the grace period does not change.
- Varies by plan: Some health insurance plans may have specific grace period terms.
Benefits of grace period in health insurance
The grace period isn’t just a technical detail—it offers real, tangible benefits:
- Prevents policy lapse: Gives you time to renew and avoid policy termination.
- Ensures continuity of coverage: Especially critical for senior citizen health insurance, where medical coverage interruptions can be life-threatening.
- Retains waiting period progress: If you’re in the middle of a waiting period for a particular illness, timely renewal through the grace period ensures that the count continues.
- Avoids the hassle of reapplication: Lapsed policies may require a fresh application, medical tests and higher premiums.
Are grace periods and waiting periods the same in health insurance?
No, the grace period for your health insurance is not the same as the waiting period. Waiting period denotes a fixed length of time after policy issuance, during which you cannot raise a health insurance claim for treatment. This is usually 30 days. However, this applies only to planned medical treatments. In case of accidental/emergency treatment, you can raise a claim with your insurer even during the waiting period.
The grace period, on the other hand, allows you to pay your health insurance renewal fee after the due date has passed. For example, if your health insurance policy renewal payment is due on January 1, 2022, you can pay it until January 31, 2022, if you have a 30-day grace period. If you do not pay by the stipulated date, your insurance will lapse, and your insurer may start a fresh policy issuance process with a health check-up if required.
Conclusion
Late payments on your health insurance premiums, as well as failing to renew your coverage during the grace period, may be inconvenient and costly. Claims may not be processed during this period and you lose the continuity benefits.
If you have any pre-existing clinical conditions, purchasing a new healthcare plan will be difficult, and you will have to restart the waiting period.
So, pay your health insurance policy renewal premium on time to enjoy continuing coverage advantages and prevent jeopardising them. Even if there is a grace period, do not postpone payment unless there is an emergency.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.