Have you ever hesitated to get health insurance because of worries about claim rejections? You’re not alone! Many people avoid health insurance because of the worry—what if they need it, and the claim gets rejected for some minor technicality?
But here’s some good news! A recent change in health insurance regulations can significantly ease your concerns and provide much-needed relief.
The Problem:
Imagine a medical emergency: the stress, the bills. Then comes the added blow of your insurance claim being denied because of a minor detail you forgot on the application years ago. This is a common concern for many Indians with health insurance.
In the past, insurers could cancel your policy or deny claims even after years of renewing it, causing uncertainty for customers. To address this, around 2020, IRDAI introduced the “moratorium period.”
The Solution:
The Insurance Regulatory and Development Authority (IRDAI) has introduced a major step forward for policyholders! They’ve reduced the moratorium period for health insurance claims from 8 years to 5 years (effective April 1, 2024).
What Does This Mean for You?
This new rule significantly reduces the chance of your claim being rejected after 5 years of continuous policy coverage. Here’s the breakdown:
- Peace of Mind After 5 Years: Made a genuine mistake on your application? Forgot a minor detail or a childhood illness? After 5 years of continuous coverage, your insurer can’t reject your claim for these reasons.
- Accidents and Emergencies Still Covered: This doesn’t mean you wait 5 years for any claim! Accidents, emergencies, and even pre-existing conditions (if disclosed upfront) are still covered throughout your policy.
Key Points to Understand
- Continuity is Key: The reduced moratorium period of 5 years applies as long as you maintain the policy continuously. Even if you switch insurance providers (portability), as long as there’s no break in your policy, your moratorium period remains intact.
- Claims After 5 Years: Once your policy crosses the 5-year mark, the insurance company cannot reject your claim, even if there was non-disclosure or some information was left out during the initial policy purchase. However, it is crucial to provide accurate information when taking the policy to avoid any complications.
- Initial Sum Assured vs. Increased Coverage: The moratorium period applies to the initial sum assured when you first took the policy. For example, if you took a policy in 2024 with a sum assured of ₹10 lakh, the moratorium period for this initial sum assured will be completed in 2029. If you increase it to ₹15 lakh in 2027, the moratorium period for the additional ₹5 lakh will start from 2027 and complete in 2032.
Where the Moratorium Applies
- Non-Disclosure and Misrepresentation: If you forgot to disclose some medical information at the time of taking the policy, the insurance company cannot deny your claim after the 5-year period, provided there was no fraudulent intent.
- Genuine Errors: Sometimes, due to oversight, policyholders might miss sharing some medical history or details. The new regulation ensures such genuine errors do not lead to claim rejections after the moratorium period.
Exceptions: When Claims Can Still Be Denied
Fraudulent activities can still lead to claim rejection. Examples include:
- Manipulated Documents: Altering or faking documents to support a claim.
- False Hospitalization: Filing claims for hospitalizations that never happened, or for injuries that are not genuine.
- Billing Fraud: Instances where there is double billing or exaggerated billing. In such cases, not only will the claim be rejected, but the policy might also be terminated.
Impact on Policyholders
The reduction of the moratorium period is a significant relief for policyholders. Previously, genuine claims were sometimes rejected due to non-disclosure of information that might have happened many years ago. With the new 5-year period, policyholders can be more confident that their claims will be honoured after this period.
Have questions about your health insurance policy? Drop them in the comments below or reach out for a detailed consultation. Don’t let uncertainties keep you from getting the most out of your health insurance.
