Most health insurance policies are valid for one year, and the policyholder is required to renew them for another year at the end of the policy period. To those, who fail to renew their mediclaim or health insurance policy in time, the health insurance companies give a second chance, known as a grace period for renewal of health insurance. So, the mediclaim renewal grace period is the extra time policyholders get to pay the premium and continue enjoying the benefits of their health insurance coverage without a break.
Grace period for health insurance renewal usually varies anywhere from a week to 30 days. The grace period for the health insurance policy is like a lifeline and must be used as such. If you fail to pay the premium within the grace period, your policy expires, and you lose all the benefits along with the privileges and loyalty points you must have earned over some time.
The health insurance grace period should not be confused with the waiting period. The waiting period is when new policyholders have to wait before getting benefits from the health insurance policy. The claims filed during this period are rejected.
Benefits and privileges you could lose:
You are without cover
The most significant disadvantage of not renewing your health policy during the health insurance grace period is that you are without cover. The lapsed policy does not provide you with any insurance cover, and even if you apply for a new approach, it may take days before you get one. Given the costs of medical treatment and hospitalization, it is not wise to remain without an insurance policy even for a day.
You will lose a no-claim bonus
no-claim bonus is one of the most attractive features of health insurance policies. It is an incentive that the insurance companies give to their customers who do not claim in a year. It is given either as a cumulative bonus or a discount in premium. A cumulative bonus means your coverage amount for the next year will increase, depending on thHealte bonus, while the premium will remain the same. If you have a health policy of Rs 4 lakh and your company gives you a bonus of 25,000 for not making any claim in a given year, your policy’s coverage amount will go up to Rs 4.25 lakh next year.
Alternatively, you could get a discount on the premium for the following year.
Portability of policy
If you allow your policy to lapse, you lose the facility of porting it to a new health insurer. You are required to request porting a plan at least 45-60 days before a policy’s expiry date.
The new policy is bound to be expensive
A new policy will cost you more because health insurance costs keep rising. Plus, you would be a year older, another factor that leads to higher premiums.
Longer waiting period
Health insurance plans have a waiting period of 24-48 months applicable to certain pre-existing conditions and maternity benefits. With the new plan, you will have to wait for another couple of years before you can start using these facilities.
-up again
You may have to go for a detailed health check-up to get the new policy. This medical test is a time-consuming process; besides, what if you fail the medical examination? You are not required to go for a medical test for the renewal of a health policy.
Lifelong renewability. Some insurance policies have a provision for life-long renewability, and if you allow your plan to lapse, you lose this privilege.