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What is Grace Period in Health Insurance Plans

Team AckoJan 17, 2024

Safeguarding yourself and your family with a robust health insurance policy will help you tide over treatment expenses, especially unplanned hospitalisation. An active health insurance policy will protect you during such times. Therefore, it is advisable that your health insurance policy should not become invalid due to non-payment of the premium. Sometimes life can get busy and it is not surprising that you may forget to pay the premium. Thankfully, insurance companies give you a fair chance to pay the premium within a specific time frame. This time frame is known as the grace period in health insurance plans during which the insurer keeps your coverage active




What is the Grace Period?

The grace period, means it is a time the insurance provider gives after the due date to pay your premium before the policy becomes inactive. The grace period can differ between insurers and the type of policies. This time frame is indicated in the policy’s terms and conditions, usually between 15 days to 30 days. Make sure you read the policy wordings so that you do not miss out on paying the premium on time. The terms and conditions also specify if the No Claim Bonus (NCB) is valid during the grace period and if any claims will be approved or rejected when the premium is yet to be paid.

What is Grace Period in Health Insurance Plans?

Grace period, in health insurance is an amount of time your health insurance company allows you to pay after the premium due date has lapsed. This is clearly specified in your health insurance policy document about the number of days by when you need to pay the premium.

Most health insurance companies do not settle any claims raised during the grace period until the premium is paid by the due date of the grace period. It is important to keep your health insurance active at all times to ensure a seamless process in case of unplanned hospitalisation. Make sure you pay the premium within the due date instead of depending on the grace period to avoid unnecessary hassles.

How Does it Work?

It is imperative to pay all outstanding health insurance premiums during the grace period so your health insurance coverage does not end. The insurer gives a grace period so that you do not miss out on paying the premium even if you have forgotten the due date. Here is an example to understand the grace period in health insurance better:


  • Your health insurance plan expired on 10 July 2020 and you have missed paying the insurance premium by the due date.

  • The insurance provider gives you a grace period of 15 days to make the payment.

  • The extended due date is 25 July 2020 – the last date to pay the premium to continue enjoying the coverage.

Do note: If you do not pay the premium within the grace period, any claims raised during the grace period will be rejected by the insurer. Also, once the grace period lapses, any accrued NCB, exclusions, waiting period for pre-existing diseases will become invalid.

Renewing Your Health Insurance Plans During the Grace Period:

Depending upon the type of health insurance policy and the insurance provider, grace periods for renewal of health insurance can vary. This can be anywhere from 24 hours to 30 days. Check the terms and conditions to know the renewal grace period on your health insurance plan. Also, your insurance provider may charge a penalty for paying the premium within the grace period. This is because of non-payment within the premium due date. You can renew your health insurance plan during the grace period to avoid losing the coverage.

How to Renew/Revive Lapsed Health Insurance Policy on Time?

There are two scenarios, one where you have not paid the premium within the due date and the second when you do not pay the premium within the grace period. You can revive the policy within the stipulated time period specified in the policy document, and you need to pay the accumulated unpaid premium along with penalties and interest. Some insurance providers offer schemes to revive lapsed health insurance and a deadline to avail the same.

However, if you want to renew your health insurance policy, which has expired but does have the grace period to renew it, you can renew your health insurance online as well as through the offline method. Follow the steps below to renew the lapsed/expired health insurance plan:

  • Step 1: Visit the insurance company’s website for online payment (For the offline process, talk to your insurance agent for more details).

  • Step 2: Log in to access your account.

  • Step 3: Choose the option to pay the premium, make the payment and receive the policy to your registered email address.

Benefits of grace period in health insurance

  • It gives you the time you need to make sure you continue using the benefits of your policy.

  • Can avoid termination of the policy for missing payments.

  • Gives you a chance to pay missed payments at a later time

Major Drawbacks of Not Making the Renewal Payment on Time:

Like all insurance, health insurance also has disadvantages if you do not make renewal payments on time. Here are some of the major drawbacks:

  • Nil Coverage Benefits: Since you have not paid the premium, the coverage until you pay the premium will be considered void and any claims raised during the period will be considered invalid.

  • Loss of Pre-Existing Coverage: Certain policies and insurers invalidate the inclusion of pre-existing diseases in the policy. You may have to go through the waiting period again as stipulated in the policy’s terms and conditions.

  • Loss Waiting Period of Critical Illness: Certain critical illnesses such as cancer, heart surgery, etc. have a waiting period before you can avail of treatment. However, some insurance companies may cancel the inclusion. You will have to go through the waiting period before such critical illnesses are covered again.

  • Loss of No Claim Bonus (NCB): All health insurance plans are offered with a discount or a bonus for not raising any claims during the policy period. By not renewing the policy you end up losing the NCB.

  • Lapse of Medical Check-ups: Certain insurers offer medical check-ups upon completion of the required waiting period. By letting your health insurance lapse and by not paying the renewal premium, you may lose the medical check-up benefit. You may have to wait until it is offered again.

  • Renewing a Lapsed Health Insurance is Expensive: Since the policy lapses, you may have to buy a new health insurance plan. By losing the policy, you also lose the NCB that you may have earned. By purchasing a new policy you lose the discount and the result is a higher premium.

  • Loss of Portability: You have the option to change the health insurance provider by porting the existing policy to the new provider. However, when the existing policy lapses, you lose the choice to port the policy to a better insurance company.

Also, read: Family health insurance plans

The Difference Between Waiting Period and Grace Period:

There is a stark difference between the waiting period and the grace period in health insurance. One should not be confused between the two terms of health insurance. Below are the main differences between waiting and grace periods in health insurance:

Waiting Period Grace Period
Only for pre-existing conditions/illnesses or coverage such as maternity/newborn baby For complete health insurance coverage
A longer period of up to 3 to 4 years A short period of 24 hours to 30 days
No penalty or late fee Penalty or a late fee may be applicable
Claims will be approved for treatment other than pre-existing illnesses or conditions Claims will be rejected during the grace period for all types of treatment.

How Grace Periods Can Affect Your Mediclaim?

Health insurance providers ensure you get enough time to pay the renewal premium. They do so by offering a grace period from the due date. Even if you pay late, within the due date of the grace period, you continue to enjoy the benefits of the policy such as waiting period, medical check-ups, the inclusion of pre-existing conditions, NCB, etc.

However, if the grace period is not offered by the insurance company on the policy, the health insurance policy lapses since you missed the deadline or the due date. In such a case, you won’t be able to raise a mediclaim and under the policy avail hospitalisation for treatment. This is especially crucial in case of an unforeseen hospitalisation like an accident.

Wrapping up!

Health insurance plans help you save money and time when you need it the most. A medical emergency can’t be predicted, however, investing in a good health insurance plan that suits your requirements can help you in your time of need. Make sure you renew it on time or within the grace period to ensure you don't have to deal with medical emergencies alone.

Frequently Asked Questions:

Below are some of the common questions about the grace period in a health insurance policy:

What if I do not renew within the grace period as well?


Your health insurance coverage will cease to be active and will expire. You also lose out on any benefits such as No Claim Bonus (NCB), the waiting period for pre-existing conditions, loss of medical check-ups, etc. You may have to purchase a new policy which is of higher premium since you lose out on several benefits of the lapsed policy.

Can I pay the premium after the grace period ends?


Upon expiry of the grace period, the policy lapses and you will not be able to renew the policy. However, you can revive the lapsed health insurance policy by paying penalties and accumulating premiums. This depends on the insurance company who may choose to revive the policy through schemes.

Is the grace period in health insurance policy 30 days?


Different insurance companies and depending on the type of policy, the grace period can vary between 24 hours to 30 days. Make sure you read the terms and conditions mentioned on your policy document to know the specific grace period. It is not advisable to assume that all health insurance grace periods are 30 days.

Can I pay the health insurance premium in advance?


Yes, you can pay the premium in advance and mention the commencement date of the new policy period. Based on your request, the insurance policy start date can be modified. However, it is advisable to renew the policy within the due date to avoid rejection of claims.

How long does health insurance remain active?


The health insurance policy remains active until the renewal date. A grace period is given by the insurer to the policyholder to pay the premium and then continue to enjoy the benefits. However, during the grace period claims raised will be rejected. Upon payment of the premium, the policy is activated and you continue to enjoy the benefits.

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