Insurance grace period definition and examples can hormone imbalance cause anxiety

There are many reasons an insurance company may cancel your policy, but among them, a cancellation for non-payment can be a real problem down the line. Not only will you not be insured, but other insurance companies might refuse to cover you depending on their underwriting guidelines or they might not give you a claims-free discount due to the lapse of insurance, or not offer you payment plans as a result.

In the case of a life insurance policy, beware that if you allow your policy to be canceled you may have to take a new medical exam and risk getting refused coverage or have to pay higher premiums if your health has changed since the first time you got the original policy.

With the numerous payment plans, insurance companies offer you should be able to find a way to pay within the insurance grace period by discussing your payment options with your agent.

Examples of How an Insurance Grace Period May be Applied

Joan was not able to pay her car insurance payment when it was due. It was due Wednesday, but she would not be able to pay it until Friday. She called her insurance agent and asked her what she should do. The insurance agent told Joan that she has a 15 day grace period to pay her car insurance payment and there would be no extra charge to pay the car insurance payment within that grace period. She also assured Joan that her car insurance coverage would stay in effect as long as her car insurance payment was received within the 15 day grace period. Example 2: Payment for Insurance Policy Not Received When the Claim Happened, but Due to Grace Period the Claim Gets Paid

Jennifer purchased a new insurance policy for her condo, her agent told her that the premium was due on June 20th. Jennifer decided to pay her premium by sending her check in the mail on June 15th, expecting that it would be received in time. Unfortunately, the postal service took longer than expected, and by June 22nd when Jennifer called to make a claim, her agent told her the payment had not been received. Jennifer was shocked because she had mailed the payment. She was in a panic but her agent told her not to worry because of the insurance grace period, she had an additional 5 days before her policy would be canceled. The insurance grace period saved Jennifer a lot of money because her claim was covered and her check arrived at the insurance company the next day. Thanks to the insurance grace period everything worked out. Next time, Jennifer decided she would rather just pay with electronic funds transfers through her bank to avoid the stress of such a close call. Example 3: Claim Not Paid On New Home Because Grace Period Was Not Respected

Jeff and Julie purchased a policy for their new home, this was their first home insurance so they were not really familiar with how the insurance grace period worked. Jeff though Julie was going to pay the policy and Julie thought Jeff would take care of it, next thing you know the grace period was over and the policy had not been paid. The insurance company sent them a letter and tried to call them, but because they were in the middle of moving into their new home, they missed the calls and didn’t see the mail. The second night in their new home, a pipe burst causing water damage on the first floor. They called the insurance company only to find out that the grace period had ended two days earlier and they had no coverage. Luckily it was not a big damage, but it cost them over $5,000. Then the insurance company advised them that they would not insure the home until the repairs were completed, so they had to look into alternative insurance for higher risk properties because their mortgage required proof of insurance to protect the loan. If they had understood the importance of paying within the grace period, this would have never happened. Example 4: Affordable Health Care Act (ACA) and Grace Periods

Although not all health insurance is required to provide an insurance grace period, under the ACA, Insurers must give policyholders receiving advance payment of premium tax credits a 90 day grace period to pay their premiums if they have already paid one installment. However, if the full premiums are not paid in full by the third month of the grace period, the insurer may cancel the policy backdated to the last day of the first month of the grace period term.