Grace period in medical insurance is a duration of 15 - 30 days after the renewal premium due date that allows you to renew your policy without losing the benefits.

When you purchase a health insurance policy, you pay the premium for a specific coverage period, for example, one year. The coverage continues beyond this period only if you renew your policy on or before the renewal due date.

However, if you miss this payment, you still have the option to renew your policy within this grace period. This helps you retain the benefits you have received, such as the waiting period completed during the previous policy tenure.

Break in Policy or Policy Lapse

If you renew your health insurance policy within the grace period, your coverage continues without any interruption.

However, if you miss renewing the policy even during this medical insurance grace period, the coverage gets terminated. This will lead to a break in policy or policy lapse. In this case, you may not be able to get any benefits of the coverage in case there is a medical emergency or if you have to undergo hospitalisation.

Loss of No Claim Bonus and Waiting Period Benefits

A break in policy can have negative consequences, such as loss of completed waiting period, loss of No Claim Bonus, and even higher premiums since you have to purchase a new policy.

You may have to wait longer to cover specific health conditions or pre-existing diseases and you may lose the No Claim Bonus accumulated.

Face Challenges While Purchasing a New Policy

Based on your past records, you may be denied a new health insurance policy or may have to undergo a medical screening before approval.

There are two modes of premium payment in TATA AIG health insurance: single premium payment and installment payment.

Single Premium Payment Mode

For health insurance plans with a single premium payment mode, you get a 30-day grace period to renew the policy and avoid a break in coverage.

However, the health insurance coverage is not available during this grace period. And, if the policy is not renewed within this time, it will be terminated.

Instalment Premium Payment Mode

For health insurance plans with an instalment premium payment mode, the grace period may vary. It is 15 days for monthly premium payments, and 30 days for annual, half-yearly, quarterly, or limited premium payment terms.

If the payment due is during the policy period, the coverage will continue during the grace period for health insurance renewal until the payment is made.

However, if the payment is due at the end of the policy period, you will get a 30-day grace period and coverage will not be available during this period. If the policy is not renewed during this grace period, it will be terminated.

Extended Duration

The grace period for medical insurance renewal offers an extended duration after the actual premium payment due date to renew your policy.

Varying Grace Period Duration

The length of the grace period differs based on the premium payment mode, whether a single payment or an installment mode.

Coverage Applicability During Grace Period

The applicability of coverage during the grace period depends on the premium payment mode, whether single or instalment.

Risk of Policy Termination

If the policy is not renewed within the medical insurance grace period, it will be terminated.

Helps in Retaining No Claim Bonus

Medical health insurance plans offer a reward if you have not made any claims during the previous policy year. This will accumulate and provide a discount on the premium at the time of renewal or when an additional sum insured is added. If your policy lapses, you might lose these accumulated benefits.

Coverage for Pre-Existing Health Conditions

If there is a break in policy, you may have to restart your waiting period for a specific health condition. Renewing within the grace period prevents restarting this waiting period all over again.

Offers Extra Time to Manage Payments

If you have missed the renewal premium payment due to a financial emergency, you can use the grace period to address the challenge and arrange for the payment.

Ensures Continuous Coverage

Even if you have missed the renewal premium due date, you can still ensure continuous coverage if you renew your health insurance policy within the grace period.

Prevents Policy Termination and Higher Premiums

With the grace period for renewal of health insurance, you can avoid policy termination and a break in policy. This also helps in avoiding a new policy purchase at higher premiums.

Waiting period refers to the duration that you need to wait during the policy tenure to avail the health insurance coverage benefits.

On the other hand, the health insurance renewal grace period refers to the extra time that you get to pay your renewal premium if you have missed the actual payment due date.

Key Differences

If you pay your renewal premium during the grace period in health insurance, you can retain the waiting period benefits you have accumulated. However, if you have missed renewing your health insurance plan even during the grace period, the waiting period will restart. Let us understand this with an example.

Let us assume you have purchased a health insurance policy on 20th Oct 2023 with a waiting period of 2 years for a pre-existing health condition. Consider that you have renewed this policy on 19th Oct 2024. In this case, you have completed one year of the waiting period.

Now, if you have renewed your health insurance policy by 19th Oct 2025, you will successfully complete the two-year waiting period and become eligible for coverage of your pre-existing health condition.

If you pay the renewal premium within the grace period, your waiting period completion will still be counted.

However, if you miss paying premiums even during the grace period of health insurance, your policy will lapse and you may have to go through the two-year waiting period all over again.

Loss of Health Insurance Coverage

If you miss renewing your health insurance on time, you might lose your health insurance coverage benefits. This can increase your out-of-pocket expenses.

Coverage May not be Available During the Grace Period

The coverage benefits may not be available to you if you file a claim during the health policy renewal grace period.

Late Payment Fees During the Grace Period

You may have to pay additional late payment fees when renewing your health insurance policy during the grace period.

Denial of Renewal

Your health insurance plan renewal can be denied if it has lapsed. As a result, you might have to purchase a new medical insurance plan for which you may have to pay an extra premium.

Loss of Accumulated Benefits

If you miss renewing your health insurance policy on the due date or during the grace period, you may lose the benefits accumulated, such as the No Claim Bonus and waiting period benefits.

Waiting Period Increases

If your health insurance policy lapses, you may have to purchase a new policy, and the waiting period will restart. This will increase your waiting period to avail of certain coverage benefits.

Health insurance coverage for claims during the grace period depends on the premium payment mode.

For health insurance plans with an installment premium payment mode, the grace period is 15 days for monthly premium payments and 30 days for annual, half-yearly, quarterly, or limited premium payment terms.

If the payment is due during the policy period, coverage will remain in effect during the grace period until the payment is made. So, you can file a claim. However, if the payment is due at the end of the policy period, the grace period is 30 days and the coverage will not be available.

For medical health insurance plans with a single premium payment mode, the grace period is 30 days. The health insurance coverage is not available during this grace period.

Pay Attention to Notifications

You will receive notifications regarding health insurance renewals through phone calls, SMS, or emails. Make a note of these notifications and take the necessary steps promptly.

Set Reminders for Timely Action

Set reminders on your phone or calendar. You can even choose a policy start date that is easy to remember, such as your birthday or anniversary, to reduce the chances of missing the renewal date.

Understand Grace Period and Applicable Conditions

Make sure you understand the conditions applicable to the grace period for renewal in health insurance, specific to the premium payment mode and take the necessary steps.

• Visit the official TATA AIG website.
• Under the ‘Renewal’ tab, click on ‘Health’.
• Enter your ‘Policy Number’ and click on ‘Renew’.
• Review your existing policy, revise the coverage and include optional add-ons if necessary.
• Pay the applicable premium online using a convenient payment option.

Paying your health insurance premiums on time is essential to ensure that you have coverage when you need it. The grace period in health insurance ensures you get extra time to pay the premium in case you do not do so because of some unforeseen events.

However, if you fail to renew your policy during the grace period, it will lapse. This will lead to a loss in coverage and accumulated benefits.

Therefore, it is important that you take the necessary steps promptly to renew your health insurance policy without delay.

TATA AIG offers a wide range of health insurance plans with personalised solutions. Compare the different options and choose the best health insurance policy to suit your specific healthcare needs.

And most importantly, remember to renew it on time to ensure continuous coverage with increasing benefits!