Health insurance policyholders have cause for celebration as the Insurance Regulatory and Development Authority of India (IRDAI) has made favourable adjustments to product regulations. These revisions will be applied to all new policies and integrated into existing ones upon renewal. In April 2024, IRDAI introduced updates to health insurance regulations, emphasising decreased waiting periods and improved claim settlement terms for policyholders.
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The waiting period for ailments has been shortened from 8 to 5 years, while the waiting period for pre-existing conditions has also been decreased. Additionally, the maximum age limit for purchasing a health policy has been eliminated.
Check the details below;
Moratorium period for claims
The moratorium period till March 31, 2024 was 8 years. Now within six years they will become entitled to it. This step is considered as a huge relief as 8 years is a long period and five years is enough time for pre-existing conditions to surface.
The moratorium period refers to the duration after which an insurer cannot deny your claim for reasons other than fraud. This period has been reduced from 8 years to 5 years. After 5 years of continuous coverage (including portability and migration between policies), the insurer cannot contest your claim on grounds of non-disclosure or misrepresentation.
IRDAI has said that after 60 continuous months of coverage, the insurance company cannot reject any claim of the customer on the grounds of non-disclosure and misrepresentation. The insurer can reject the claim only if fraud is proven.
Company cannot reject a claim after 5 years
Let’s understand this with an example. Suppose a policyholder pays the health policy premium for five consecutive years, in such a situation, the insurance company cannot reject the policyholder’s claim because he/she has hidden health information.
Usually, insurance companies reject claims based on not providing information about pre-existing conditions like diabetes, hypertension, asthma, even if the reason for the policyholder’s hospitalisation was for some other reason. Insurance companies not only reject the claim but also cancel the policy citing non-disclosure.
Waiting period for pre-existing diseases reduced
Previously, insurers could exclude coverage for pre-existing conditions for up to 4 years. Now, the waiting period has been brought down to a maximum of 3 years. This applies to new policyholders only, but existing policyholders will also benefit as their waiting period gets reduced upon renewal to align with the new 3-year limit.
This means that if you have a condition like diabetes, your insurer will cover hospitalisation claims related to the condition after you have paid at least three premiums, as opposed to the previous requirement of four premiums.
Similarly, insurers will no longer be able to deny claims due to non-disclosure of pre-existing illnesses after 60 months of continuous coverage, except in cases of proven fraud. In other words, if you have paid five annual premiums, your claim cannot be rejected based on hiding your health status or providing incorrect information unless the insurer can demonstrate fraud.
Almost all health insurance policies come with a certain waiting period for pre-existing diseases. It means that the coverage of that particular disease starts only after the waiting period. Till now, rules mandate a waiting period of four years. Now it has been reduced to 3 years.
It is to be noted that many insurers offer plans with waiting periods of less than 4 or 3 years. However, IRDAI’s move will help customers as the new rule sets a reduced limit now.
Maximum age is not a problem now
Till now insurance companies needed to offer regular health coverage to a person upto 65 years of age. By changing rules, the maximum age condition for purchasing a health policy has been removed.
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