The pandemic has taught us the importance of healthcare support and financial stability. Planning well ahead for any medical emergency is the need of the hour. A good health insurance policy provides the necessary financial support, but many are unaware that no health plan provides coverage from the first day. If you are buying a health insurance plan for the first time, you must know what is meant by a health insurance waiting period.
What is health insurance waiting period?
It is important to understand this crucial term and how it affects a policyholder. The health insurance waiting period refers to the period in which the insured cannot avail any benefit payable for certain procedures or services. In other words, it is the time from the start of the policy that one needs to wait before using the insurance benefits. The purpose of including health insurance waiting period is:
● to Prevent Fraudulent Claims
● to Avoid Unethical Use of Insurance
● to Avoid Losses Due to High Claims
● to Protect Insurance Companies from Medical Risks
To understand the waiting period applicable to your policy, go through the policy document provided by your health insurance company. Read the fine print carefully, and don’t hesitate to ask your insurance advisor questions. Clear all your doubts and understand all the features of the plan before finalizing a health insurance policy. Always choose a policy with the shortest waiting period, keeping other aspects in consideration.
Different Types of Waiting Period in Health Insurance Plans
Every health insurance policy has a waiting period and it depends on factors like age, overall health, and medical conditions if any. Let us understand the various types of health insurance waiting periods.
Initial Waiting Period
This period is also called the cooling period and it needs to come to an end before you can avail any benefits of the health insurance policy. It ranges from 30 to 90 days. As per industry standards, every health insurance policy today has a minimum initial waiting period of one month. You cannot claim any insurance benefit if you fall sick or get hospitalized within this period. However, in most health plans, the exception to this waiting period is an accidental claim for immediate hospitalization.
Pre-Existing Diseases Waiting Period
According to the IRDAI (Insurance Regulatory and Development Authority of India), any health condition or ailment diagnosed 48 months prior to buying the health insurance policy is a pre-existing disease. Pre-existing diseases are primarily chronic conditions such as diabetes, hypertension, and thyroid disorders. At the time of purchasing health insurance, if you declare that you have a pre-existing disease, the insurance company will conduct medical tests to assess its impact. Based on the test reports, they will decide whether to accept your application by charging additional premiums or reject it due to medical complications.
The health insurance waiting period for pre-existing diseases ranges from 3 to 4 years. Suppose the insured is diagnosed with another disease for the first time during this period. In that case, it won’t be considered as a pre-existing disease and they will be provided with insurance coverage. As per the recent IRDAI amendment, no disease diagnosed within the three months of buying a health insurance policy will be considered a pre-existing disease. As a result, treatment won’t be subject to the pre-existing disease waiting period. Also, note that a policyholder does not need to complete the pre-existing waiting period if she/he is looking for health insurance portability.
On the other hand, if the insured does not declare a pre-existing disease at the time of buying a health insurance policy and makes a claim for the same, it will not be honored. To avoid long waiting periods, it is advised to take health insurance early in life when there are fewer chances of having a pre-existing disease.
Waiting Period for Specific Diseases
Most health insurance companies have different waiting periods for specific diseases like osteoarthritis and osteoporosis, pancreatitis, cataracts, hernia, hemorrhoids, and ENT disorders. The health insurance waiting period for these diseases ranges typically from 2 to 4 years. Every health insurance company has its own specific list of diseases. Details of the diseases and their corresponding waiting periods are clearly mentioned in the policy document.
Waiting Period for Maternity Benefit and Newborn Baby Cover
Maternity insurance and newborn baby cover are provided as an add-on in individual and family health insurance plans. The health insurance waiting period in such a case ranges from 2 to 4 years. For instance, if the waiting period for your maternity cover is 2 years, then include nine months of pregnancy along with the rest of the 15 months to calculate the complete waiting period.
A policyholder should get this benefit added to their existing health insurance plan in advance, considering the long waiting period. All the maternity expenses can then be covered as needed. The maternity benefit covers delivery expenses and expenses of the newborn baby including vaccinations and any other medical expenses. Some insurers offer lower waiting periods for additional premiums.
Waiting Period for Accidental Hospitalization
Accidents can cause fatal injuries which require immediate hospitalization. In such a case, a health insurance waiting period may cause delay, endangering the life of the victim. Hence, no health insurance company has a waiting period for accidental hospitalizations. The initial waiting period is also not applicable in such circumstances. Most health insurance policies allow the policyholder to raise a claim for accidental cover within that period. It is always advisable to check these details with your insurer.
Waiting Period for Coronavirus
Since the outbreak of the novel coronavirus, to date, new cases of infections continue to get recorded. No doubt, having health insurance that covers COVID-19 is required more than ever. IRDAI has directed all the health insurance companies to offer COVID-19 as part of their insurance plans. The plans cover the cost of the treatment for the disease, including hospitalization, the treatment of comorbidities, home care, and PPE. The health insurance waiting period for these plans ranges from 15 to 30 days. These days, people are also buying health insurance policies online to cover COVID-19 expenses.
How to reduce health insurance waiting period?
- Most health insurance companies give their users an option to reduce health insurance waiting periods by paying extra premiums, known as Premium Loading.
- Group health policies don’t have any health insurance waiting period. Employers often offer such policies to their employees and allow them to claim cover even for pre-existing diseases from day one without any waiting period. Employees also can convert their group health insurance into an individual health policy before leaving the company to retain the benefit of no waiting period.
- Some health insurance companies provide a facility to senior citizens to altogether remove health insurance waiting periods by adding a Co-pay Clause. This clause states that the policyholder will have to bear a certain percentage of the claim amount to do away with the waiting period. For example, if the claim amount is Rs. 200,000 and co-pay is 30%, the policyholder will have to bear Rs. 60,000.
What is grace period in health insurance?
Grace period is the additional time that a health insurance company provides to its policyholder after the due date to pay a premium. If a policyholder does not pay the premium within the grace period, the policy becomes inactive. Different insurers have different grace periods for different types of policies. It is usually between 15 to 30 days. Some insurance providers charge a penalty for non-payment of the premium within the due date.
Most health insurance companies reject any claim made during the grace period until the premium is paid. Your policy document will have a clear mention of the grace period of the policy. Always renew the policy before the grace period ends to ensure coverage for unplanned medical emergencies or hospitalization. If you do not pay the premium within the grace period, any accumulated No Claim Bonus (NCB) or exclusions like the waiting period for pre-existing diseases will become void. Post your grace period, your health insurance policy will lapse as well which means you will need to buy/issue a fresh policy.
How do you renew your expired health insurance policy within grace period?
A policyholder can revive an inactive expired health insurance policy within the grace period by paying unpaid premiums with interest and penalty. Some insurance providers offer a deadline to revive an inactive expired policy so that you don’t lose the coverage. If your expired policy still has some grace period remaining, you can easily renew your health insurance policy online by making an online premium payment. Just follow these easy steps:
● Visit your insurer’s website
● Log in to your account
● Make an online payment
● Get your policy at the registered email address
If you renew your health insurance policy on time, there won’t be any waiting period in renewed policies.
The IRDAI also gives the right of portability to all health insurance policyholders at the time of renewal. The policyholder can switch from one plan to another or from one insurer to another without losing any accumulated benefits. The new insurer will acknowledge the waiting period credits for pre-existing diseases that were accumulated with the old insurer.
To avail portability, you need to renew your policy without any gaps, and you should inform your insurer at least 45 days in advance before your renewal due date. Renewing your policy on time also gives you tax benefits on premiums under Section 80D of the Income Tax Act. The benefits can go up to INR 25,000 per year for premiums paid for self, spouse, and dependent children and an additional INR 25,000 for dependent parents. Benefits up to INR 50,000 can be availed if any of the parents are more than 60 years of age.
What if I forgot to renew my health insurance within the grace period?
Most of the health insurance plans are valid for one year only. To avail benefits of your health insurance policy continuously, you need to always renew it on time. In case of non-renewal within the grace period, you will have to buy a new plan, and you may face the following losses.
- Coverage is lost due to non-renewal, impacting your finances during sudden hospitalizations or medical emergencies.
- You are entitled to a bonus amount or a discount in the premium if you do not file a claim for the entire year. This is called the No Claim Bonus. In the case of non-renewal, you lose this bonus, and buying a new policy is expensive.
- If you do not renew your policy on time, buying a new policy will mean that a new waiting period is applicable to it. You will have to pass the entire waiting period again.
- You will need to undergo a detailed medical examination again when buying a new policy. It will be a time-consuming process.
- You will lose any chance of portability if you miss the grace period. Portability can be requested only at the time of renewal.
- In the case of senior citizens missing the grace period to renew their plan, lifelong coverage is lost. It may be difficult to find another health insurance plan considering the progressed age.
To Sum Up
The bottom line here is that before selecting a policy, it is vital to understand all the aspects of health insurance. Learn all the basic terms, such as health insurance waiting period and grace period, and then make an informed decision. It is always beneficial to invest early in health insurance. You can easily get it when you are young without any medical check-ups, at lesser premiums, and with maximum coverage. Not to forget, a shorter waiting period in the health insurance policy is another advantage of early investment in health insurance. It will help you avail timely and convenient medical aid without worrying about medical expenses. Timely payment of premiums is equally essential to ensure continuous insurance benefits.