Health insurance is an agreement between the insurance company and the insured customer in which the insurance company agrees to pay the claim in case of hospitalization or medical emergency of the insured customer in return for a certain amount known as premium. Retail health insurance is a type of health insurance where the policy can be offered to individuals and families. Group health insurance is a type of health insurance where the policy can be offered to a group of members such as organizations.
Grace Period: The policy period or the validity of a retail health insurance policy would usually be one year from the date of taking the policy. In certain cases the policy period can be more than one year such as two years or three years which are known as long term policies. The retail health insurance policy has to be renewed at the end of the policy period to continue enjoying the benefits. If the customer is not able to renew the policy on the last day also then the insurance company provides an extension or leverage to the customer by extending the date by a few days which is known as the grace period. In simple words, the grace period is the additional time a customer gets after the expiry period or the last date to pay the premium in order to avoid a policy lapse.
Grace period in Retail health insurance: The grace period in a retail health insurance policy is usually 15 days from the date of expiry of the policy. Grace period is the time in which the policy would be put on hold and after the period the policy would be lapsed and any accrued benefits would also lapse. To prevent the lapsation and loss of accrued benefits it is advisable to renew the policy within the grace period by paying the renewal premium. In case of retail health insurance policies if the grace period is 15 days then the premium should be paid within 15 days or the policy would lapse after 15 days. The waiting period benefits, no claim bonus benefits accrued during the previous policy period would lapse with the policy and the customer has to accumulate the benefits from starting if the policy is renewed after the grace period.
What happens if it’s not renewed before the grace period?
If the retail health insurance policy is not renewed within the grace period the policy would lapse and all the benefits accrued under the policy will be lost. Incase of retail health insurance policies the insurance companies permit the customers to claim during the grace period but the claim settlement would be done subject to the receipt of premium during the grace period. If the customer is not able to renew the policy within the grace period then the policy would lapse and the claim would not be settled even though the claim was made during the grace period.