To understand the concept of ‘Grace Period,’ here is an example:
Shekhar Ahluwalia had bought a health insurance plan from Kotak General Insurance. However, he had forgotten to make the payment towards the premium by the due date and fears that the insurance company will cancel his policy. Will Shekhar lose his health cover or do companies allow their customers to pay the premiums past the due date?
Insurance companies allow their customers to pay for their insurance plan even after the due date has passed. However, there is a time limit for late payment of premiums called the "Grace Period."
“Grace Period” is the additional time that the insurance company grants to its customers who have defaulted in making timely payment of their premiums. As per the guidelines shared by the IRDAI, every insurance company is required to offer a grace period of 15 days for payment of health insurance premiums. However, some insurers extend the grace period to 30 days also. The grace period starts from the date on which the last payment was due. If the insurance premium is paid after the grace period, then the insurance company reserves the right to refuse the policy renewal even though the policyholder may be willing to make the payment.