Health insurance is a must-have safety net in present times. With the rise in lifestyle-related diseases and surging cost of medical treatments, it is an impeccable choice. Considering the various jargons used in health insurance plans, it is crucial to understand what they mean before signing the dotted line. It aids in your policy decision making ensuring you have a clear understanding of the terms of the policy. One such term is the grace period.
What is the grace period?
The grace period is the extra time allowed by the insurance companies to renew the policies if you, the policyholder miss on the renewal date. Major insurance companies allow a fixed duration of grace period failing which there is a policy lapse.
What are certain things to know about the grace period in a health insurance policy?
To ensure timely and continued benefits, it is essential you pay the premium and renew your policy on time. However, the grace period is an extended duration provided so you do not miss on these benefits. Let us look at certain considerations to know about the grace period:
No cover during the grace period:
The health insurance plans do not provide coverage during the grace period of your policy. Thus, if you miss your policy renewal date, you have no insurance cover even if you are serving the grace period. To simply put, the insurance plans do not provide coverage during these grace days under your policy terms.
Grace period vs waiting period:
Grace period differs from the waiting period. One often confuses the grace period with the waiting period which is a duration which the insurance company mandatorily prescribes till the policy coverage kicks in. No claim can be made during the waiting period for your policy and it differs among an individual health cover to family cover to critical illness insurance. If you fail to renew your policy within time, the waiting period restarts. This way, you will lose all your accrued policy benefits once the renewal date is missed.
Cumulative bonus benefits:
It is not each year you file a claim under your health insurance policy. Thus, when you do not make a claim, the insurance company rewards in form of a cumulative bonus which increases the sum insured of your policy. If you renew your policy within this grace period, you do not miss on such a cumulative bonus.
Policy renewal during the grace period:
The grace period for different plans varies across insurance companies and is mentioned in the terms of your contract. The regulator prescribes a duration of 15 days as grace period but it may vary among insurance companies. To enjoy continued insurance cover, it is recommended to renew the policy within this grace duration.
What if you fail to renew your policy within the stipulated grace period?
The most dreadful repercussion of non-renewal is the loss of a health insurance cover. Any emergency hospitalisation will have to be entirely funded by you. Also, you need to purchase a fresh insurance cover undergoing the entire purchase process. A health insurance premium calculator can be a handy tool that can help to evaluate the various plans based on your requirements, when required. But bear in mind that once the grace period has ended, your cumulative bonus won’t be accounted for, hence this input would be void as your would start afresh.
To conclude, it is advisable that you do not miss the renewal date and ensure its timely renewal within grace duration. It is a prudent practice to keep track of your insurance plans and its renewal to avoid a lapse in policy cover.