Moratorium Period
Definition
Purpose
How to navigate?
Simran has over 4 years of experience in content marketing, insurance, and healthcare sectors. Her motto is to make health and term insurance simple for our readers has proven to make insurance lingos simple and easy to understand by our readers.
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Anchita has over 6 years of experience in content marketing, insurance, and healthcare sectors. Her motto to make health and term insurance simple for our readers has proven to make insurance lingos simple and easy to understand by our readers.
Updated on Jul 02, 2025 4 min read
What is the Moratorium Period in Health Insurance?
In this world, even healthcare costs are going out of control; thus falling ill can be Nobody wants to fall seriously ill or want their loved ones to go through any serious medical conditions. But in case such an unfortunate situation occurs, the last thing you want to think about is piling medical bills which only adds to the stress. In these unexpected and distressing life events, health insurance can prove to be your best friend!
The term "moratorium period" can be a little confusing for some in the health insurance industry. It is a term that may not be as commonly understood as premium, deductible, or coverage. This article talks about the concept of the moratorium period in health insurance. This article aims to explain everything related to the moratorium period in health insurance and other related important information.
Moratorium Period in Health Insurance- The Definition
The moratorium period is the waiting period imposed by the insurance providers during which certain pre-existing medical conditions are not covered. During this period, you need to remain free from specific medical conditions or treatments before you can be eligible for the coverage. The duration of this period is been set by the IRDAI, which is 5 years. Meaning if you’ve had continuous health plan coverage for five years, including portability and migration, your insurer can’t challenge a claim for non-disclosure or misrepresentation, except in cases of fraud.
FYI- Earlier it was 8 years, but recently it has been revised to 5 years, effective from April 2024. This change benefits both new policies issued after April 1, 2024, and existing policies. If you’ve already completed five years of continuous coverage by April 1, 2024, you immediately fall under the new rule.
Purpose of Moratorium Period
The insurance companies issue a moratorium period to prevent the policyholders from purchasing health insurance only when they need immediate coverage for pre-existing conditions. With the enforcement of this moratorium period, the insurer aims to maintain a healthier and more balanced risk pool. This can help them in keeping the premiums manageable for all the policyholders.
How Does the Moratorium Period Work?
Waiting it Out
During the moratorium period, you need to maintain continuous coverage for 5 years without any claims. If you can remain free of the specified pre-existing conditions or treatments during this time, then only you are eligible for the coverage of such conditions in the future.Trigger
The moratorium period starts from the date your policy becomes effective. In case the insured person already has some pre-existing medical situation or needs treatment for any specific condition, it will be listed on their policy papers. Any claim related to these conditions will be denied during the moratorium period.Exceptions and Clauses
The potential person is always provided with a copy of their health insurance documents for review before they even opt for it. Like every important decision in life, before choosing, you must read the fine print of your health insurance policy. At times, many medical emergencies or fatal situations can be covered by your health insurance if those are related to your pre-existing medical condition.
Why Does the Moratorium Period Matter?
The Moratorium Period is an essential part for the following reasons-
Protecting the Risk Pool
The moratorium period helps maintain a balanced risk pool for the insurance company. Without any waiting period, individuals might purchase insurance only when they need immediate coverage for their pre-existing conditions. This could lead to a higher number of claims and, subsequently, increased premiums for everyone.To Manage Costs
Having a moratorium period, insurance can better manage costs. It allows them to predict and allocate resources more effectively. This was, why they can analyse certain high-cost conditions that would not be immediately covered, hence the decisions will be better.Legal Requirements
It is a legal requirement for the insurance providers to impose a moratorium period. In some regions, this emphasises the importance and significance of this waiting period in the health insurance company and industry.
How to Navigate the Moratorium Period?
There are a few steps you can take to get to know about the moratorium period against your policy-
Read your Policy Carefully
It is suggested that you thoroughly read your health insurance policy. Understand the conditions and treatments that are subjected to this waiting period, and take note of anything exceptional you see.Plan for the Future
If there is any pre-existing condition that you are suffering from or any need for certain treatment, you are thinking of, it is crucial to plan for the moratorium period. Make sure to maintain continuous coverage and explore the options for temporary coverage of these conditions.Ask the Expert
Understanding the terms and conditions of health insurance is kinda complex. Call your expert and seek guidance from them. They will guide you in a better way.
Conclusion
The moratorium period, now set at five years by the IRDAI, serves a crucial role in the health insurance landscape by balancing the insurer’s risk and ensuring sustainable premiums for all policyholders. While it means a waiting period for coverage of pre-existing conditions, it ultimately contributes to a more stable and affordable health insurance ecosystem. Understanding this period is vital for making informed decisions about your health coverage. It’s not about hiding medical history, but rather a structured approach to managing claims related to conditions present at the time of policy inception.
Don’t leave your health coverage to chance! Carefully review the terms and conditions of any health insurance policy you’re considering, paying close attention to the moratorium period and how it applies to your specific health needs. If you have any pre-existing conditions, plan for the waiting period by maintaining continuous coverage. For personalised guidance and to ensure you choose a policy that truly protects you, consult with a trusted insurance advisor, PolicyX, today. We can help you navigate the complexities of health insurance and secure your peace of mind.
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Moratorium Period In Health Insurance: FAQs
1. What is the moratorium period in health insurance?
The moratorium period is the period during which the insurance companies apply a no-look-back policy. IRDAI says that after completing five continuous years of policy, there will be no look-back policy applied. The above-mentioned time of five years is called the moratorium period in health insurance.
2. Is moratorium better?
Moratorium is better if you have suffered from a medical condition 5 years ago.
3. Why is the moratorium period given?
Moratorium is given to deal with financial hardship.
4. Can we cancel moratorium period?
No, Once you have opted for a moratorium period you cannot cancel it.
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Written By: Simran Saxena
Simran has over 4 years of experience in content marketing, insurance, and healthcare sectors. Her motto is to make health and term insurance simple for our readers has proven to make insurance lingos simple and easy to understand by our readers.
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