Grace Period

The grace period is an additional window after the due date during which a premium can be paid without the policy lapsing. For annual and half-yearly premium modes in Indian life insurance, the grace period is typically 30 days, and for monthly modes it is 15 days. During this window the policy continues to provide cover — if a death claim arises inside the grace period and the premium has not yet been paid, insurers deduct the outstanding premium from the benefit and pay the balance to the nominee.

For health indemnity policies, the grace period is usually 30 days, during which you can renew without losing continuity benefits such as waiting-period credits accrued for pre-existing diseases and no-claim bonus on the sum insured. Crucially, during the grace period on a health policy the cover is contractually suspended — a hospitalisation during this window is generally not payable — but continuity is preserved if you pay before the grace period ends. The distinction matters: life policies often provide continued cover inside the grace period, health policies typically do not.

Worked example: if your health premium of ₹18,000 was due on 1 October 2025 and you paid on 28 October 2025, the policy continues unchanged into the next year; but if you were hospitalised on 10 October 2025, that claim would likely be rejected on the grounds that premium was not paid on the due date. A common misconception is that the grace period extends indefinitely. It does not.

Once the grace period ends without payment, the policy lapses. A lapsed life policy can sometimes be revived within five years by paying arrears plus interest plus a fresh medical check, but revival is at the insurer's discretion. A lapsed health policy usually requires a fresh proposal, meaning waiting periods restart from zero — a significant loss if you had already served a four-year pre-existing-disease waiting.

Related: lapse, revival, pre-existing disease waiting period.