What is Grace Period in Health Insurance?

Posted on: Dec 14, 2023 | 3 mins | Written by: HDFC ERGO Team

What is Grace Period in Health Insurance?

While we all knew the importance of health insurance, many of us didn’t take it seriously until the recent COVID-19 pandemic. A health insurance policy can cover a chunk of your hospital bills and associated expenses and help you concentrate on treatment and recovery. However, when you buy a health plan, you must pay the renewal premiums on time to enjoy continuous coverage. If you fail to do so, you can still pay it within the grace period and keep your policy active. So, what is the grace period in health insurance and how does it work? Let’s find out in this article.

What is the grace period in health insurance?

The grace period is the extended or additional time for premium payment after the policy renewal date. If you forget to pay the premium on or before the due date, you can still pay it within the grace period to prevent policy lapse. However, if you don’t pay the premium within the grace period either, the insurance company may cancel your health plan. Most health insurance policies have a grace period of 15 to 30 days.

How does a grace period work in health insurance?

When you buy health insurance, you must pay the renewal premiums on time to keep your health plan active. However, if you fail to pay the policy’s premium on the due date, you still have the option of paying it within the grace period. Most insurance companies typically offer a grace period of 15-30 days. The same is mentioned in the policy documents. You can pay your policy premium within the grace period without any penalty.

Is the grace period the same as the waiting period?

No, grace period and waiting period are two different terms in health insurance.

Waiting period:

When buying health insurance, you must wait for a certain period before making claims. This is called the waiting period in health insurance. Most healthcare policies have an initial waiting period of about 30 to 90 days.

Grace period:

The grace period is related to the payment of insurance premiums. It is the extra time given to policyholders for premium payment after the due date. For example, if your policy renewal date is 25th January 2023 and the insurer offers a grace period of 30 days, you can renew your plan within these 30 days (by 24th February 2023) to prevent policy lapse.

Conclusion

A health insurance policy provides extensive coverage to policyholders and eases financial stress during medical emergencies. In case you fail to pay your policy premium on time, you can make use of the grace period in health insurance and renew your healthcare plan. This will ensure continuous health insurance coverage and save you from the hassles of buying a new health insurance policy.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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