Understanding the Moratorium Period in Health Insurance

The moratorium period in health insurance is a no-claim period for pre-existing diseases (PEDs). Such PEDs can be diabetes, high blood pressure, thyroid, arthritis, asthma, etc. All these PEDs come under the moratorium period, which means you have to wait for 5 years before availing treatment.

On 1st April 2024, IRDAI reduced the moratorium period in India from 8 years to 5 years. After this period, all your PEDs will fall under the ambit of your health insurance plans. 

Read this article to understand more about the moratorium period, its effect on policyholders, the legal aspects related to the same, and common myths about this period. 

How the Moratorium Period Affects Policyholders? 

The Moratorium Period affects the policyholder in various manners. In general, it is taken as the specified period for coverage of the pre-existing diseases. The common ways in which it affects policyholders are as follows:

1. Limited Cover:

The cover is minimum in the moratorium period. One has to wait for at least 5 years or 60 months for the treatment of his PEDs before availing benefits for those PEDs from their   insurer.

2. Encouragement to Buy Early:

With the long moratorium period, the insurance companies encourage people to buy the insurance before any disease comes up. It encourages those people in particular who have a family history of health issues. 

3. Financial Stability For Insurance:

By setting this period, insurance companies control their financial risk. It motivates people to purchase the insurance in advance to treat the diseases and increases the premiums of all the policyholders. It helps to maintain an efficient risk pool to keep premiums at an affordable cost for all. Additionally, for the policyholder it also means lower premium when the insurance is purchased early in life as premium increases with age.

4. Long Term Security

After a moratorium period, where the people have waited 5 years, they can be covered for treating their PEDs. The policyholder would attain a security with guaranteed assurance from the constant premiums for a period of 5 years.

This is why it’s very essential to completely understand the concept of moratorium period before making any decision regarding health insurance. For any query, please contact an InsuranceDekho relationship manager via email at support@insurancedekho.com or on call at +91-755 1196 989.

Key Differences: Moratorium Period vs. Waiting Period

The key differences between the moratorium period and the waiting period in health insurance are as follows- 

Legal Aspects of The Moratorium Period

• It is a Mandatory period set by IRDAI for all health insurance policies issued in India
• Policyholders have to wait for 5 years to treat any Pre-existing Disease.
• Once 5 years are completed, no insurer shall reject claims on a preexisting disease. In this case, the insurance company cannot appeal to IRDAI for settlement of such a claim.
• The moratorium period has to be compulsorily used in all health insurance policies that get issued within India. In this period, insurers have to maintain guidelines. 

How to Manage Health Risks During the Moratorium Period

Health risks during the moratorium period are to be mandatorily managed. Following are some strategies that facilitate management of health risks during this period-

1. Buy Insurance Early:

Buying insurance while young and with no disease manages the risk of health insurance in this period. It gives ample time for the treatment of your diseases.

2. Regular Checkup: 

Regular health checkups help to diagnose diseases in the early stages and avoid severe conditions. 

3. Maintain a Healthy Lifestyle: 

Maintaining a healthy lifestyle through diet and exercise helps to maintain proper health.

4. Consider Group Insurance Plans:

You can choose group insurance plans that offer a short waiting period to treat pre existing diseases. 

5. Medical Expense Financial Planning: 

Since the preexisting disease is not covered under the moratorium period, you should keep some money aside to cater to any future health needs. 

Common Myths About the Moratorium Period

There are several myths related to the moratorium period of Health insurance. Understanding these myths is very important in health policy. Such common myths are:

1. The Moratorium Period is the same as the Waiting Period:

Factually, the moratorium period is different from the waiting period. The latter is applicable for all diseases, with the time span to be decided upon by the insurance company or type of policy. Whereas for the Moratorium Period, though compulsorily applied on all PEDs, the policyholders have to wait for 5 years before any coverage can be awarded to the PEDs.

2. Claims for pre-existing conditions are never covered: 

The fact is, the claims for pre-existing conditions would be covered after the moratorium period. In fact, every policy holder will get coverage after five years.

3. The Moratorium period is optional: 

Many people thought the moratorium period was optional, whereas it's not. It's a mandatory period under the regulations of the IRDAI.

4. The Moratorium Period is a penalty for the policyholders: 

The Moratorium Period is not at all a penalty to the policyholder but acts as a financial risk management method of the insurance company and saves them from the tendency of people taking health insurance after any disease or health issues. Everyone should take health insurance at a young age to enjoy peace of mind.

In case you have any further queries on the Moratorium period, you can reach out to InsuranceDekho. They shall sort out all your doubts in relation to insurance.

Conclusion 

Moratorium period plays an important role. It is a binding rule for all the policyholders for treating their pre existing diseases. It motivates us to take health insurance in advance at a young age and enjoy peace of mind. There are restrictions, however, on a few pre existing diseases depending on the insurance company and their policy. You have to read all the terms and conditions before taking insurance.

FAQs

Ques 1. What is the moratorium period for health insurance?

Ans. If you continuously pay your premium for five years, including portability and migration, then the insurer cannot contest any claim on the grounds of nondisclosure or misrepresentation except fraud cases. This period was eight years earlier and has now been 5 years. 

Ques 2. What happens once the moratorium period is completed?

Ans. Once the moratorium period is over, the insurance company will pay coverage for your PED claims. The insurer also can't appeal to IRDAI against claim settlements once the period is over. 

Ques 3. Can I cancel the moratorium period if I want to?

Ans. No, once you have opted for a moratorium, you have to continue it. It can't be cancelled.

Ques 4. Is the moratorium period applicable to all health insurance plans?

Ans. Yes, IRDAI prescribes the period of moratorium; thereby, it applies to every health insurer in India.

Ques 5. Will the reduced 5-year moratorium period be applied to the existing policies also?

Ans. Yes, this reduced 5-year moratorium period is applicable to the fresh policyholders.