Overview
When purchasing a health insurance policy, the insurer outlines the waiting periods for pre-existing and specific conditions which are initially excluded from coverage. Recently, the regulator has shortened these waiting periods. Additionally, the moratorium period, after which claims cannot be denied except in cases of fraud, has been reduced by three years.
The insurance regulator now requires health insurance companies to decrease the maximum waiting period for full coverage of pre-existing diseases (PEDs) from four years to three. As defined in the IRDAI (Insurance Products) Regulations, 2024, notified on April 1, 2024, a PED includes any condition, ailment, injury, or disease:
a) diagnosed within 36 months before the policy start date; or
b) for which medical advice or treatment was recommended or received within the same timeframe. This definition does not apply to policies covering overseas travel.
Upon buying health insurance, the insurer evaluates any existing health conditions. For conditions classified as PEDs, coverage begins only after a designated waiting period. Reducing this period by a year can significantly benefit both existing and new policyholders by providing earlier coverage for PED-related illnesses.
Reducing the PED waiting period from 48 to 36 months is expected to encourage more people to obtain health insurance, thereby increasing coverage across the nation.
Moratorium Period
The IRDA has also cut the moratorium period from eight years to five. After this period, a health insurance policyholder is protected from claim denials on grounds other than fraud. During the moratorium, defined as sixty consecutive months of coverage, the insurer cannot challenge a claim based on previous non-disclosure or misrepresentation; however, fraud remains an exception.
Specified Disease Waiting Period
Furthermore, the waiting period for specific diseases has been reduced from four years to three. During this time, certain diseases and treatments (excluding accidents) are not covered. After the specified period, coverage for these diseases is provided if the policy has been continuously renewed without interruption.
These changes are set to apply to both new and existing policies. For first-time buyers, this means immediate benefits from reduced waiting periods. Existing policyholders will also enjoy these shorter periods upon renewing their policies, ensuring quicker access and enhanced benefits under their health insurance plans.
