What is the moratorium period in health insurance?

What does the moratorium period in health insurance mean?

The moratorium period in health insurance is a fixed time frame after which the health insurance companies are not eligible to reject any claims based on non-disclosure, misrepresentation, or pre-existing conditions (PEDs) unless fraud is demonstrated.

Let’s discuss some key points of the moratorium period:

• Significant: It saves the claims from getting rejected due to old non-disclosure agreements.


• Time-frame: 5 years of uninterrupted coverage.


• Objective: It stops the insurers from “looking back” after a certain period.


• When it concludes: No disputing for non-disclosure, apart from fraud and permanent exclusions.

Why Was the Moratorium Period Introduced?

Earlier, even if the health insurance policyholders had maintained an active policy for years, their claims would sometimes be rejected due to some neglected or undisclosed pre-existing illness. This situation left numerous policyholders feeling frustrated and conflicted during health crises. Later, IRDAI (Insurance Regulatory and Development Authority of India) introduced the moratorium period in health insurance under its guidelines. According to this rule, if the policyholder keeps their policy active for 5 continuous years, the insurer cannot reject a claim. Basically, this was introduced to increase transparency, protect policyholders and improve fairness in processing claims.

Benefits of the Moratorium Period in Health Insurance

The following are the advantages of a moratorium period in health insurance:

• Promotes Long-term Consumer Protection:Individuals who have maintained their policy active for 5 continuous years, the health insurance company cannot reject their claims on the basis of past non-disclosure, etc.


• Promotes Transparency & Reliability: The moratorium period in health insurance ensures better communication and transparency between the insurer and the policyholder by preventing penalties for minor oversights within a fixed 5-year timeframe.


• Supports Portability Without Penalty:It allows policyholders to switch insurers or plans without resetting the moratorium period, as long as continuity is maintained.

Who can benefit from the Moratorium Period Today?

• Older people with pre- existing medical conditions


• Individuals who have existing medical problems


• Those who do not disclose minor health issues when they purchase the policy.


• One who wishes to move or port their policy

Final Thoughts

A moratorium Period in health insurance is important in maintaining an equitable risk pool and guaranteeing fair health insurance premiums for all. After the 5 years of uninterrupted coverage, the insurer cannot reject claims because of undisclosed information.