Moratorium Period in Health Insurance

A moratorium period in health insurance is a fixed timeframe after which insurance companies cannot deny claims on the grounds of non-disclosure and misrepresentation.

It is also known as the look-back period in health insurance plans. The moratorium in medical insurance is a safety clause for policyholders, ensuring that insurance companies cannot deny claims due to discrepancies in the proposal form.

Once the moratorium period is over, insurance companies can only reject the fraudulent claims and claims related to permanent exclusions. This also helps individuals and families to accurately disclose their medical history when purchasing the plan.

The moratorium period in medical insurance offers numerous benefits to both insurance companies and policyholders. Let us cast light on some of its benefits.

Benefits for Insurance Companies

Prevents Health Insurance Misuse

The moratorium in health insurance helps in preventing policy misuse. With the period in place, individuals and families defer from purchasing a plan only after being diagnosed with a serious and critical illness.

Encourages Early Health Insurance Purchase

The moratorium period also motivates people to buy health insurance early, ideally in their 20s or 30s. At this stage of life, the risk of serious illnesses is generally low, which means your policy can run continuously without major claims.

Promotes Honest Disclosure

The moratorium period also promotes honesty and transparency when purchasing a health insurance plan. Since insurers cannot reject claims after the period ends, it encourages policyholders to disclose all health details truthfully at the time of buying the plan.

Benefits for Policyholders

Protection Against Unfair Rejections

One of the crucial benefits of a moratorium in medical insurance for policyholders is that it prevents unfair claim rejections. The insurance company cannot use technicalities and health assessments to reject a claim after continuous coverage.

Enhanced Claim Security

Once the moratorium period is over, your health insurance plan offers stronger claim security. The insurer cannot deny claims due to errors or omissions in past disclosures, as long as there’s no proven fraud.

Reduced Claim Disputes

The moratorium period in health insurance plans also helps in lowering the claim disputes between policyholder and insurance provider. The period helps in avoiding the misunderstandings and disagreements during claim settlement resulting in faster claim settlement.

The moratorium period benefit applies to all health insurance policyholders who maintain continuous coverage with timely renewals. Whether you have an individual, family floater, or senior citizen health plan, you can enjoy this benefit as long as the policy remains active without breaks.

Also Read: Survival Period in Health Insurance

Earlier, the moratorium period in health insurance plans was 8 years. However, with IRDAI’s new moratorium rule guidelines, the period has been reduced from 8 years to 5 years. This became effective as of April 1, 2024.

The coverage is applicable for both individual and family health insurance plans. To avail of the benefits, 60 months of continuous health insurance coverage are required.

The TATA AIG health insurance plan comes with a moratorium period benefit of 5 years. Under this, after completing five continuous years of coverage under a health insurance policy including portability or migration, your claim or policy cannot be rejected or contested for non-disclosure or misrepresentation unless there’s proven fraud.

The moratorium applies to the sum insured in your original policy. If you later increase your coverage, the five-year period will count separately from the date of enhancement for the additional amount. However, all policy terms, such as limits, sub-limits, co-payments, and deductibles, will still apply as stated in your policy document.

The working of the moratorium period in a health insurance plan in different scenarios is as follows:

At the Time of Buying a Health Insurance Plan

Individuals and families purchasing a health insurance plan must disclose any pre-existing conditions or health issues they are currently experiencing to the TATA AIG representative. This is essential to avoid future claim rejections.

You need to submit documents related to any pre-existing medical conditions and undergo a medical examination. Medical expenses related to pre-existing conditions will not be covered during the moratorium period.

However, you can claim the medical expenses related to accidents or other medical conditions that are not related to pre-existing conditions.

Once the Moratorium Period is Over

Once the moratorium period is over, you can claim the medical expenses related to pre-existing conditions. However, fraudulent claims and expenses that are permanently excluded from the plan will not be covered.

Also Read: Grace Period in Health Insurance

Let us understand the workings of the moratorium period in health insurance plans through an example.

Moratorium Period without Pre-exiting Condition

Sohini, a 27-year-old professional, bought a health insurance plan from TATA AIG with a sum insured of ₹15 lakh. She has been renewing her policy regularly every year without any break.

After completing five continuous years of coverage, TATA AIG cannot reject or dispute any future claim based on non-disclosure or misrepresentation, unless there is proven fraud.

Moratorium Period with Pre-exiting Condition

Rohan, 36 years old, purchased a health insurance plan with TATA AIG with a sum insured of 25 lakh. At the time of purchase, he disclosed that he had hypertension, a pre-existing condition.

Let us say the coverage for pre-existing diseases like hypertension comes with a waiting period of 3 years. So, in the first few years, Rohan cannot claim medical expenses related to hypertension.

So after a 3-year waiting period, he can claim the medical expenses related to hypertension. TATA AIG will accept the claim but still review the disclosures due to the ongoing moratorium period.

However, once the moratorium period is over, which is 5 years, Rohan's claim for hypertension cannot be rejected unless it is proven fraud.

Also Read: How does Health Insurance with a Waiting Period work?

When choosing a health insurance policy, you can consider factors related to the moratorium period that might influence your decision:

Be Upfront About Pre-Existing Conditions

Regardless of the moratorium period, it is always best to be honest about your medical history during the application process. This allows the insurer to set appropriate premiums and avoids any claim rejections later.

Consider Your Health Status

A moratorium period might not be ideal if you have pre-existing conditions and need coverage sooner rather than later. Explore alternative options, such as group health insurance plans offered by employers, which may have less stringent waiting periods for pre-existing conditions.

Compare Policies

Though the moratorium period is standardised, other policy features can vary. Look for coverage that aligns with your needs, such as hospitalisation expenses, OPD consultations, or critical illness benefits. Choose a plan that offers comprehensive coverage after the moratorium period.

Buying and renewing TATA AIG’s health plan with a moratorium period is an easy process. Here is how you can do it.

Buy Health Plan with Moratorium Period

• Go to the TATA AIG website and scroll to the “Health Insurance" section under the “Personal” tab.
• Select the suitable health insurance plan based on your specific needs. Select the individuals and click on the “Get Price” button.
• Fill out the details, such as your name and mobile number. Disclose pre-existing conditions, if any.
• Different TATA AIG health insurance plans will be available; choose the one that best fits your needs and budget requirements.
• Check the moratorium period and, once you are certain, make a payment using your preferred gateway.
  Once the payment is done, the health insurance plan with the moratorium period will be sent to your registered email address.

Renew Health Plan with Moratorium Period

• Go to the TATA AIG official website and scroll to the “Renewal” tab and select the “Health” option.
• Fill out the health insurance policy number and click on the “Renew” button.
• Renew or modify your existing health insurance plan to meet your specific needs.
• Once verified, make the health insurance plan payment using a preferred mode.

After a successful payment, a renewed health insurance plan will be sent to you. Timely renewal of health insurance plans is necessary for the moratorium period.

Also Read: Waiting Period in Health Insurance

Even after the moratorium period is over, health insurance claims can get rejected if they involve fraud. Fraud refers to any deliberate act meant to mislead the insurer or gain benefits dishonestly. Here are some examples of what is considered fraud:

False Statements

Any kind of false statement provided to the insurance companies, such as a wrong name, age, etc, at the time of buying and renewing the health insurance plan.

Active Concealment

If you have hidden the medical conditions or past treatments from the insurance provider at the time of purchasing the plan.

Deceiving Act

Any kind of manipulation or alteration related to medical reports, bills, or documents to support a false claim.

Unfair Means

Any attempt to gain benefits from a health insurance plan through dishonest or unethical methods is considered a fraudulent activity.

The moratorium in medical insurance offers protection to policyholders against the unfair claim rejection. It also helps in reducing the liability of the insurance provider.

The moratorium period in health insurance plans ensures security that the claim will not be disputed due to technicalities or minor unintentional omission made by policyholders years earlier. However, when purchasing a health plan, it is crucial to accurately disclose medical information to the provider.

TATA AIG offers various other medical insurance plans that include a moratorium period benefit. For instance, our individual health insurance comes with a moratorium period of 5 years and provides comprehensive medical coverage for a single person. It ensures financial protection against unexpected healthcare expenses while also offering long-term claim security once the moratorium period is over.

Along with this, the medical insurance plan also offers additional benefits, including cashless claims, tax benefits, wellness services, and more, to its customers. Secure your health with our affordable health insurance plan now!