What is the Grace Period in Health Insurance Plans?

The above plans and premiums are for AED 1,000,000 Sum insured for 1 Adult of 30 Years for Dubai city.

Buying a health insurance plan comes with understanding a lot of new concepts and terms. However, among the bigger and more popular terms like claim settlements, pre-existing diseases cover and critical illnesses, some of the lesser-heard but important terms get slip by. One of these terms is the health insurance grace period. The health insurance grace period is a duration you can use to renew your health insurance plan if it is already past its due date. Let’s learn about the grace period in health insurance plans in more detail.

What is Grace Period?

Grace period in health insurance is that additional amount of time you get to pay off your due premium amount so that your policy does not expire and you can keep the benefits. The Health insurance grace period is not like other kinds of grace periods. Providers can set any length of grace period they see fit in the case of health insurance. A few health insurance providers may not even offer any kind of grace period at all. So, while the concept of a grace period exists here, it is generally there as per the discretion of the providers.

How Does Grace Period Work in Health Insurance Plans?

Health insurance grace period does not work like grace periods in other kinds of insurance plans. This period in the health insurance plan is not pre-fixed. It can range from a few hours to a month. The allowed health insurance grace period depends upon the provider completely. Some may not even allow any grace period to cover the missed payment. The working of the grace period is simple – you get an additional time after the due date of your health insurance premium to complete the due payment. For example, assume that your provider allows a grace period of 10 days. Your due date to cover the premium was April 10, 20XX. As per your grace period, the last date to cover your premium is April 20, 20XX. After April 20, your plan would expire and you won’t be able to renew it. You can only buy a new plan for yourself.

Grace Period Vs Waiting Period – An Overview

As discussed earlier, the grace period in health insurance is the duration you have to pay the due premium amount of your health insurance plan. On the other hand, the waiting period is the duration you need to cover to get a certain benefit from your health insurance plan. For example, if you have 6 months waiting period for maternity cover, your cover will start 6 months after buying the cover. The waiting period comes at the beginning of the plan before the coverage for a certain benefit begins. While the grace period comes in the end.

Can You Renew Health Insurance During Grace Period?

Yes, the whole existence of the health insurance grace period is to make sure that you have extra time to pay the due premium. However, some providers may charge an extra fee for the late payment. This is not a standard for all the providers but it is a possibility you may find on your plate. Other than that, renew your plan during the health insurance grace period.

What Happens to Your Policy If You Do Not Pay Premium During Grace Period?

Naturally, your health insurance plan expires if you fail to make a payment within the health insurance grace period. In most cases, the health insurance policy gets cancelled by the provider the reason being “non-payment of the premium”. With the health insurance policy cancelled, you won’t have any access to the benefits of the plan or have your claims settled.

The first step here may be to buy a new health insurance policy from a different provider. However, since health insurance plays a major role in determining your financial responsibility factors, other providers may refuse your request. By not paying the premium on time, you not only present yourself as a high-risk customer but also showcase that you are not financially responsible.

On another hand, some providers may offer you a new health insurance policy. However, since you are buying this policy from scratch and the previous policy had already been expired, you may end up paying a very high premium. Additionally, the provider may require you to undergo a medical exam as well. While there is nothing non-standard about medical examinations, going through them during the later years of your life may lead to the discovery of many age-related conditions. This will only increase the premium of the plan furthermore.

How Can Grace Period in Health Insurance Affect Claims?

As explained above, the way the health insurance grace period works don’t allow you a lot of freedom with claims. Most providers do not consider claims filed during the grace period. The grace period only allows you to make the due payment for your health insurance plan so that it does not expire.

However, some providers may allow you to submit claims during the health insurance grace period and honour them as well. This is only applicable with emergency medical treatment claims though. Non-emergency medical insurance claims are not entertained by most providers. If there is no grace period allowed in your health plan, no claims will be entertained by your provider. This applies to all emergency and non-emergency medical claims.

In addition to this, if you have already claimed emergency medical treatment or hospitalisation or any other expenses that may take longer to close, the insurance company can put the claim on hold. If you have a health insurance grace period from the insurance company and pay the renewal amount, you may get the claim settled as per the policies of the plan. However, if the grace period has not been allowed, your plan will lapse and the claim won’t stand. Yet again, this applies to both emergency and non-emergency claims. As evident, the presence of a grace period in a health insurance plan is quite cryptic and important too.

Disadvantages of Renewing Health Insurance Late

Whether it is after the due date of the premium or right after the health insurance grace period ends, if your health insurance plan expires due to late payment, there is a series of disadvantages that you may face. Give below are some of the top ones to help you get a fair idea:

No Coverage and Legal Issues: If you fail to pay your premium before the stipulated due date, the provider will pull the coverage and you will be left without any protective umbrella. While in other countries where health insurance is optional, this may seem like a problem that will only last a couple of days and may make little to no impact on the policyholder. However, having an up and running health insurance plan at all times is mandatory for all residents in the UAE. This means that you will not only be left without proper coverage but also find yourself in legal dilemmas. This can be seen as the biggest disadvantage of not renewing your health insurance plans in time.
Pre-Existing Coverage Loss: Even though all health insurance plans are mandated to cover pre-existing health conditions in the UAE, not renewing your plan in time may lead to a lapse of this particular benefit. Not paying the premium in time means that your current plan will expire and be cancelled. When you set out to renew this plan, you will have to start from scratch and build up the benefits. Since most health insurance plans cover pre-existing diseases after a waiting period, this benefits lapses right alongside the rest of the benefits.
Loss of Covered Waiting Period: In addition to pre-existing diseases, any cover that comes with a waiting period is lost when your health insurance expires. This includes covers like critical illness cover, dental cover, optical covers, etc. Yet again, just like pre-existing diseases cover, you will have to work from the bottom to get all the benefits again.
Expensive Renewals: Renewing an expired or cancelled health insurance plan can often be expensive. Providers may levy a fee for late payment or a fee for reviving the already cancelled plan. You may end up buying a new health insurance plan altogether which will probably come with higher premiums. This is because time and age factor-in when the premium of the plan is decided. The low premium you got a few years back won’t appear now that you are older and more susceptible to falling ill.
Claims Stand Invalid: Most providers do not entertain claims if you make them during the health insurance grace period. If a provider accepts the claims during the grace period and you fail to make the payment within the allowed time limit, your health insurance claim will be deemed invalid and denied.

Can You Renew an Expired Health Insurance Plan? How?

The short story is that you can renew the expired health insurance plan if your provider allows you to have a health insurance grace period. If you do not have a health insurance grace period, renewing the same insurance plan won’t be possible. However, you can buy a new health insurance plan in its place. It can be with the same or another provider. Depending on your options and choices, you can go forward and buy the plan.

Conclusion

Grace is a lifeline that brings your dying health insurance plan back to life. However, you must be clear about the terms related to this particular clause from the beginning. Make sure that your provider has clear terms about the health insurance grace period applicable to your policy. Mind that different plans from the same provider may have different policies. As long as you have a clear understanding of the terms of your grace period, your renewal should go smoothly.