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Grace Period

A grace period is the additional time granted after a premium payment is due during which an insurance policy remains active, even though payment has not yet been received. It provides policyholders with a short window to make late payments without losing coverage. The grace period ensures continuity of protection and helps prevent accidental policy lapses caused by missed or delayed payments.

In health, dental, life, and disability insurance, the grace period typically lasts 30 or 31 days from the premium due date. If the premium is paid within this period, coverage continues uninterrupted. If payment is not received by the end of the grace period, the policy is considered lapsed, and benefits cease until the policy is reinstated or reissued.

Example:

If your health insurance premium is due on March 1 and you miss the payment, your insurer allows a 31-day grace period. As long as payment is made by March 31, your coverage remains in force with no interruption.

What to Watch For:

Keep track of premium due dates to avoid unintentional lapses. Claims made during the grace period may be delayed until payment is received. Once the grace period expires, reinstating coverage may require new underwriting or approval, especially for individual policies. Always confirm the exact length of your grace period, as it may vary depending on your insurer and policy type.

Related Terms

Generic Substitution

Generic substitution means your plan reimburses prescription drugs based on the cost of the lowest-priced equivalent generic medication rather than the brand-name drug, unless a doctor indicates “no substitution” for medical reasons.

Government Health Insurance Plan (GHIP)

A Government Health Insurance Plan (GHIP) is the publicly funded healthcare program administered by each Canadian province and territory. It provides residents with access to medically necessary hospital and physician services at no direct cost, funded through provincial taxes and federal health transfers. GHIP ensures that all eligible residents receive essential medical care regardless of income or health status, forming the foundation of Canada’s healthcare system.

Group Insurance

Group insurance is a type of coverage that provides benefits to a defined group of people, typically employees of a company or members of an organization, under a single master policy. Instead of each person purchasing an individual policy, the group is insured collectively, which allows members to access broader coverage at lower rates. The employer or organization acts as the contract holder, while individual participants receive a certificate of insurance outlining their specific benefits.

Group Policyholder

A group policyholder is the organization or employer that owns and administers a group insurance plan on behalf of its members or employees. The group policyholder holds the master policy issued by the insurer, manages enrollment, collects premiums, and ensures that the plan complies with contractual and regulatory requirements. In most cases, the policyholder is the employer, while the insured members are the employees and their eligible dependents.

Guaranteed Acceptance

Guaranteed acceptance refers to an insurance plan that does not require medical questions, health history, or evidence of insurability for approval. Coverage is automatically granted to anyone who applies and meets basic eligibility criteria such as age or residency. This type of plan is designed for individuals who may not qualify for medically underwritten insurance due to pre-existing conditions, chronic illnesses, or other health concerns.

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