While one-time pay options are available, most health insurance plans are offered on a subscription basis. This means that medical expenses under the policy will be covered until we make timely premium payments. But what happens if we miss an insurance premium? Most health insurance providers offer a grace period for insurance renewal. You can renew your insurance policy during the grace period to enjoy continuous coverage and benefits. If you don’t renew your policy even after the grace period, it will lapse and may be terminated.
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The Downside of Missing Family Health Insurance Renewals
Here are some consequences you may face if you miss the grace period:
Any bonus you have earned will be nullified if you don’t pay your premium on time and your insurance policy lapses. Consider an example where you have made timely payments for three years and have never claimed insurance. In this case, you will have received no claim bonus, which would have reduced your premiums. However, if you miss the grace period for insurance renewal, the no-claim bonus will become zero, and you will have to start afresh.
Suppose your policy has a three-year waiting period for heart problems. Although you have paid premiums and waited for three years until now, missing out even once will reset the waiting period. This will increase the total waiting period before enjoying insurance benefits, especially for pre-existing diseases.
A health insurance policy secures you financially during medical emergencies. If you miss the grace period for an insurance policy, it breaks the coverage, and you must pay all the premiums out of pocket.
Some insurers allow you to renew your lapsed policy after missing the grace period. However, this comes at additional costs, which can vary from insurer to insurer. Additionally, the no-claim bonus (if any) you lose will cause the premiums to go up.
Section 80D of the Income Tax Act, 1961, allows deductions on health insurance policy premiums. If your policy is terminated after missing the grace period, you will not be able to claim Section 80D tax-saving benefits.
Health insurance portability lets you switch to a new insurance company if your current insurer cannot meet your healthcare needs. You need to initiate portability at least 45 days before the renewal date. Thus, if you are in the grace period or miss it, you cannot even port to a new insurer.
Insurers only consider continuous policy coverage for waiting periods. So, waiting periods will restart if you buy a new policy or don’t renew the existing one on time. Although there is no coverage during the grace period, renewal within this period is still considered a continued policy.
You can use several measures to manage premium payments for timely renewal, including:
Many apps let you automate premium payments so you never miss a timely payment. For instance, you can automate payments using Unified Payments Interface (UPI) or digital wallet apps like Google Pay, Paytm, PhonePe, etc. Similarly, you can also use your banking application to automate payments with your debit or credit card.
If you don’t want to automate premium payments, you can set reminders. Use digital tools like Google Calendar, Google Keep, Microsoft To Do, and more to set reminders for renewal dates.
Regular financial status review is essential to ensure you can afford timely payments. If you are facing any issues, you can schedule premium payments to coincide with your salary dates for better cash flow management.
Getting late on paying your health insurance premiums can have severe implications. You may lose coverage, bonuses, waiting period, etc. Grace period for insurance renewal offers financial flexibility for renewing health insurance on time. You should proactively manage policy payments by automating them, setting reminders, and reviewing your financial stability.
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Reviewed by Dr. Harshita Dahiya 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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