What is Difference Between Waiting Period and Moratorium Period?
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In health insurance, the prime difference is that a waiting period restricts you from claiming for specific medical conditions, while a moratorium period restricts whether an insurer can reject your claim based on past non-disclosures.
Take a closer look at the following table to understand the key differences:
Feature | Waiting Period | Moratorium Period |
Primary Purpose | Delays coverage for specific illnesses, specifically pre-existing diseases (PEDs), to prevent immediate claims. | Protects long-term policyholders by making their claims non-contestable after a set period of time. |
Typical Duration | Typically, 1 to 3 years for specific treatments and declared PEDs. | 5 continuous years (60 months) as per the IRDAI from the date of policy issuance. |
Claim Legality | Any claim made before this period ends is automatically rejected. | Claims cannot be rejected for non-disclosure or misrepresentation once this period completes |
How Does the Waiting Period Affect Health Insurance Claims?
The waiting period directly affects whether your insurer will approve your claim. It starts from the date you purchase the policy, and the time period can differ with the insurer and the type of waiting period.
If you make a claim for a treatment or condition that falls within the waiting period, the insurer can reject it, even if your policy is active.
For example, Riya buys a health insurance policy in January, which has a 2-year waiting period for her pre-existing diabetes. Suppose she has to stay at the hospital for a diabetes-related complication after 12 months, and she raises a claim. The claim will not be covered. However, once the waiting period ends, she can claim covered expenses as per the policy terms.
For this reason, it is important to understand what the waiting period is in health insurance!
How Does the Moratorium Period Benefit Policyholders?
The moratorium period or look-back period benefits policyholders by providing greater claim security after paying premiums for a specified period without a break. Once you pass the period, insurers generally cannot reject claims on the basis of non-disclosure, misrepresentation, or PEDs unless they can prove fraud or deliberate misrepresentation.
For example, Amit has maintained his health insurance policy continuously for five years. After passing the timeframe, he filed a claim for a condition that was not specifically disclosed when he bought the policy. Now, the insurer cannot deny the claim solely on that ground since he has completed the period, unless they are successful in establishing a fraudulent intent.
This gives long-term policyholders added peace of mind and confidence while filing claims.
Tips to Manage Waiting and Moratorium Periods Effectively
To navigate waiting and moratorium periods effectively, you can use the following tips:
Buy Insurance Early
Purchasing health insurance at a younger age helps you in two ways. You can easily complete waiting periods since most people do not have major PEDs at a young age. For example, if you buy a policy at 25, a 3-year waiting period may be over before major health issues arise.
Disclose Medical History Accurately
It is necessary to provide correct information about your health while filling out the form to buy a policy. Hiding a pre-existing condition can lead to claim rejection, even if you diligently completed the moratorium period.
Renew Policies on Time
Timely renewals preserve policy benefits and protect the progress you've made toward completing waiting and moratorium periods. One missed renewal could affect your coverage continuity and may lead to a reset of these timelines.