There are times when we experience a money crunch causing us to miss payments way past the due date. But what happens when you incur such an issue with your health insurance policy? Not only can this lead to cancellation of the plan but also end the coverage that are secures you. One benefit you can enjoy under health plans is the grace period available just for such situations. So, let’s go understand what grace period is and its features.
What is Grace Period?
You may already know what is health insurance but many a time grace period is a features most are unaware of. Grace period is a fixed number of days a policyholder gets to make the payment after the due date has passed. Which simply means that in case you forget to make the premium payment on the renewal date, you get some extra days to do it. So, during this time your policy is still in effect and hasn’t lapsed, yet. Now this period may vary from one insurer to another and thus, it is vital to know the grace period for your health insurance policy.
Renewing Your Health Insurance Plan in the Grace Period
Grace period can differ based on the health insurance policy you choose. Many insurers offer you period of 24 hours to 30 days to renew your plan and secure your health for any future requirements. But in case you are renewing your policy during the grace period, you might have to bear a penalty for the late payment.
What Happens After Grace Period is Over?
If you are unable to make payments after the grace period, your insurance policy shall lapse. It will not be possible to renew your policy any longer and you will have to buy a new plan. Thus, the insurance company shall treat you as a new customer. The disadvantages of this that your waiting period will restart, and any new illnesses diagnosed during your previous policy term will be reviewed as pre-existing conditions.
Features of Grace Period in Health Plans
Allow us to take you through the key features of grace period:
- Many insurers offer shorter grace periods to policyholders but a period between 15 to 30 days is common
- In case you are unable to pay during the grace period, you will have to undergo the entire application process to regain your coverage
- During the grace period are eligible for coverage even if you miss the payment due date but this can vary from insurer to insurer
- If you successfully make you payment within the said period, you will not lose out on the no claim bonus for making zero claims in the policy year
- If you have a critical illness insurance with waiting periods for pre-existing conditions, specific illnesses, maternity cover, etc. and you fail to pay during the grace period, you shall lose the progress made with the waiting period. But this will not happen in case you are able to pay within the set number of days.
With this, you are now aware of the importance of grace period and why it is necessary to make your payments on time. At an older age, losing your health cover or the progress made with the waiting period can have a bad impact in the long run. Thus, you can opt for automatic renewal if you tend to forget payments or make financial arrangements during you due date.