An insured should renew their health insurance policy in time i.e. on or before the due date. It is important to keep an eye on the renewal date of a health insurance policy. If you miss out the renewal date, then the grace period is a saviour.
Insurers provide an extended time frame for policy renewal if you miss out the due date to renew the policy, such extended duration for renewal period for health insurance policy is called grace period.
Insurers provide a grace period of 7 to 15 days depending upon the terms of policy, provided that the premium payment will be made within the stipulated time-period. The policyholder will not get insurance protection during the grace period. The coverage will start, once the payment is been made.
Policy portability is not possible in case of the grace period. Insured cannot switch the insurer when he is been provided a grace period for policy renewal.
After the tenure of grace-period, if no payment is made, the policy lapses. After that no policy benefits such as coverage of the waiting period for pre-existing diseases, the no-claim bonus will be provided to the insured.
Why timely renewal of health insurance policy important?
No-Claim Bonus (NCB):
Experience of a claim free year and renewal of policy on time provide a chance to avail no-claim bonus benefit to insured. No-claim bonus adds up a specific percentage of sum insured. Some insurer also provides a discount on renewal premium amount in case of NCB.
Coverage of Waiting period:
If the health insurance policy is lapsed due to non-payment, you have to buy a fresh health insurance policy by following the whole process again which leads to nullify the continuation benefit. All waiting period will be applicable afresh and you have to wait again for the coverage of pre-existing disease or other specific diseases.
Since policy portability is not possible after the due date of renewal so it is important to keep yourself aware about the renewal date of health insurance in order to seek the benefits which can be availed by switching the insurer.
Always keep a reminder of the due date of policy renewal so that you do not regret the loss of continuation benefits.
Rahul has purchased a health insurance plan in 2015. The health insurance plan has a waiting period of 3 years for coverage of pre-existing disease and 2 years waiting period for specific disease coverage. The policy offers 10% no-claim bonus for every claim-free year.
Rahul renewed the policy on time for two years but failed to renew the policy in 2018. He did not even make the payment within the grace period of 15 days provided by the insurer. He missed out the renewal date and even the stipulated time of grace period.
Unfortunately, his health insurance plan lapsed and all the policy continuation benefits ended. All the benefits which he has earned by staying and renewing the insurance policy for the tenure of two years are forgone.
In such a case, Rahul purchased a fresh health insurance plan. Again he has to wait for 3 years to get the coverage of pre-existing disease.
Also Read: Cashless Claim Vs. Reimbursement Claim
If he would have renewed the policy on time, all the continuation benefit would have been provided to him.
Hence, It is good to have a health insurance plan for a long haul rather than purchasing new health plan every year or after a short tenure of two or three years. Timely renewal of health insurance plan is a must. Because insurer always appreciates timely renewal of policy in terms of value-added benefits such as no-claim bonus, free health check-ups or various other discounts.