What Is Moratorium Period In Health Insurance?

What is the Moratorium Period in Health Insurance?

The moratorium period in health insurance is a fixed time frame after which insurers cannot reject claims based on non-disclosure or misrepresentation of details provided in the proposal form.

As per IRDAI guidelines effective from April 1, 2024, moratorium period in health insurance has been reduced from 8 years to 5 years. Once a policyholder completes 60 continuous months of coverage, insurers must honor claims even for undisclosed pre-existing conditions, unless they can prove fraud.

Navigating different components of a health insurance like moratorium period can be tricky. How about an expert by your side for end-to-end help? Book a free call to talk to our IRDAI-certified insurance advisors now!

Introduction

Imagine your mediclaim being denied after 7 years of paying premium, only because you forgot to disclose a past health issue. Thank God for the moratorium period in health insurance preventing such nightmares.

According to IRDAI’s rules, no insurer can deny medical claims after a certain period of continuity, i.e., the moratorium period. So, whether you’re looking to buy health insurance or have one already, having a comprehensive understanding of the moratorium period helps.

This article explains:

Why does a moratorium period in health insurance exist?
What are the benefits and drawbacks of moratorium period for insurers and policyholders?
What are the IRDAI rules for the moratorium period?
What is the difference between waiting period and moratorium period?
How does the moratorium period in health insurance affect claims?

What is the Purpose of Moratorium Period In Health Insurance?

The moratorium period in health insurance primarily exists as a safety clause. All a policyholder has to do is to successfully complete 60 months of continuous coverage. Beyond that, no claims made can be rejected by the insurer on the grounds of misrepresentation or non-disclosure, unless fraud is proven.

Here’s what the IRDAI regulation explicitly states about moratorium period in health insurance: "No policy and claim of health insurance shall be contestable on any grounds of non-disclosure and/or misrepresentation except for established fraud, after the completion of the Moratorium Period, i.e. 60 months of continuous coverage Note :The accrued credits gained under the ported and migrated policies shall be counted for the purpose of calculating the Moratorium period."

How Does the Moratorium Period Work?

For the first 5 years, the insurer reviews your disclosures and evaluates claims strictly.
After this period, the insurer’s right to contest your claim becomes restricted.
Once the moratorium period is over, your claim cannot be denied for any reason other than fraud (even if you accidentally missed disclosing a minor pre-existing condition).

IRDAI Rules For Moratorium Period In Health Insurance

Moratorium reduced from 96 to 60 months effective April 1, 2024.
All health insurers must include the moratorium period in individual and family floater plans.
The 60 months coverage must be unbroken. Porting within 45 days continues your moratorium from the original start date.
After the moratorium period, insurers can only reject claims by proving deliberate fraud.
Honest mistakes don't qualify as fraud.
The burden of proof lies with the insurer.
Moratorium applies a fresh only to the enhanced portion while the original amount retains its benefit during SI increase.

What Counts As Fraud To Reject Claims As Per The Moratorium Period In Health Insurance?

If you or anyone on your behalf (like a doctor, agent, or hospital) attempts to cheat or mislead the insurer in any way to get claim money or benefits, it’s considered fraud. This includes:

Making a false statement
Hiding a fact you know to be true (active concealment)
Any act to deceive the insurer
Any act that the law defines as fraudulent

If fraud is proven:

All benefits under the policy are cancelled.
Your premium is forfeited (you will never get it back).
You’ll have to return any claim amount already paid. Everyone involved in the false claim is jointly responsible to repay it.

Remember, the insurer cannot reject your claim or cancel your policy for fraud if you can prove that:

The incorrect statement was made honestly (to the best of your knowledge), and
You had no intention to hide or mislead.

Benefits and Drawbacks of Moratorium Period In Health Insurance

A moratorium period in health insurance works to strike the balance between the insurer and policyholder’s interest.

Moratorium Period in Health Insurance: Benefits and Drawbacks for Policyholders

Benefits	Why it matters	Drawbacks
No looking back after 5 years	After 60 months of continuous cover, claims can’t be rejected for past non-disclosure or misrepresentation (unless fraud).	You only get this shield after 5 years. Before that, non-disclosure can backfire.
Pre-existing conditions get real protection	Once moratorium is done, your old disclosures won’t be used to contest a PED-linked claim.	Waiting periods/exclusions still apply.
Portability credit stays intact	Port/migrate without losing moratorium progress, helps one switch to a better plan.	Don’t let the policy lapse as a break resets the clock.
Fewer claim disputes	Less back-and-forth on ancient paperwork which means faster, calmer claims.	Keep records. as fraud or permanent exclusions can still deny a claim.
Encourages discipline	Staying continuously insured pays off with certainty at claim time.	Plan sum insured (SI) hikes: a higher SI starts a fresh 5-year clock on the increased portion.

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Moratorium Period in Health Insurance : Benefits and Risks For Insurers

Benefits	Why it matters	Risks
Lower adverse selection	Encourages early purchase and continuity	Strict underwriting is required during proposal time to verify key disclosures.
Balanced risk pool	Predictable, stable premiums when more people stay on cover	Continuous monitoring required during renewals
Fewer disputes/litigation	Non-contestability after 5 years reduces costly post-claim conflicts.	Clear communication and documentation needed to avoid gray areas.
Portability friendliness	Credit transfer ensures better consumer trust & retention.	Clean data sharing required across insurers during porting/migration.
Product clarity	Clear rules simplify servicing and claim decisions.	Post-moratorium liability can rise, so price products accordingly (SI hikes create fresh timeline).

How Does Moratorium Period In Health Insurance Affect Claims?

Here’s how it impacts claims at policy purchase and after the moratorium period ends.

At policy purchase: Insurers ask about pre-existing conditions, which one must disclose truthfully. They may also request medical documents or pre-policy check-ups. Based on the records, the coverage and standard waiting period (now reduced to 3 years maximum for pre-existing diseases as per IRDAI guidelines) are set.

Accidents are covered from day 1 while newly diagnosed ailments (unrelated to PED) are covered after 30 days, subject to not being in the specific illness waiting period list (covered after 2 years).

Common Scenarios and Outcomes

Claim Accepted Before The End Of Moratorium Period

A customer buys a policy in Jan 2023 and forgets to mention a minor gastritis episode from 2018. In Jan 2026 (3 years later), she filed a claim for gallbladder surgery. The insurer notes the non-disclosure but sees it’s unrelated to the claim. In this case, the claim should be accepted because the missing information was not important and wasn’t done on purpose.

Claim Rejected Before End of Moratorium Period

A customer (45), had mild diabetes but did not disclose it when buying a policy in May 2022. In May 2025, he filed a claim for kidney complications due to diabetes, still within the 5-year moratorium. Insurer finds non-disclosure and rightly rejects the claim as the moratorium period is not complete and the non-disclosure is material to the claim illness. In this case, the claim was rejected due to material non-disclosure within moratorium period.

Claim Accepted After Moratorium Period

A customer (38), with a thyroid disorder didn’t disclose when she bought the policy in June 2019. After completing the 60 months moratorium by June 2024, she filed a claim in November 2024 for cardiac issues linking back to her thyroid disorder. In this case, the insurer cannot reject the claim based on non-disclosure as moratorium is complete, except in cases of fraud or permanent exclusions.

Difference Between Waiting Period and Moratorium Period in Health Insurance:

The waiting period in health insurance is when you cannot claim for specific conditions. For pre-existing diseases, IRDAI has reduced the waiting period from 4 to 3 years starting April 1, 2024. During this time, insurers won't cover those conditions at all.
In contrast, the moratorium period protects one from claim rejections due to disclosure issues after 60 months. Once it ends, only fraudulent claims and permanently excluded conditions can be denied. The insurer loses the right to question your disclosure.

Remember, both waiting and moratorium periods require continuous renewals.

Why Choose Ditto For Health Insurance

At Ditto, we have helped 8,00,000+ customers become smart health insurance buyers by matching the right plan to their unique needs. That’s why our customers trust and recommend us every time.

Conclusion

The moratorium period in health insurance is a powerful consumer protection feature. For long-term policyholders, it rewards them with enhanced security and absolute peace of mind. However, navigating the clauses of the moratorium period is easier said than done. So, it's always recommended to get an expert’s help.

At Ditto, our IRDAI-certified advisors offer end-to-end guidance to design a health insurance plan that works for your benefit. No spam, no pressure, pure guidance to make you a confident insurance buyer. Book your free call with Ditto and get the best coverage for your health.

FAQs:

Does every health insurance policy have a moratorium period?

Yes, all individual and family floater health insurance policies in India must include a moratorium period as per IRDAI rules. This period is currently 60 months (5 years) of continuous coverage during which claims for pre-existing conditions are restricted. After completing the moratorium without breaks, insurers cover all pre-existing illnesses except cases of proven fraud or permanent exclusions.

When does the 5-year moratorium start and what counts as “continuous”?

It starts from the policy inception date. Keep renewals on time. Any lapse resets the 60-month clock. Port within 45 days to keep continuity.

Can my claim be denied after the moratorium

Yes, for established fraud or permanently excluded conditions. The insurer must prove fraud. Honest errors are not fraud.

How does a sum insured increase affect the moratorium?

The extra amount starts a new 60-month clock. The original base cover keeps its completed moratorium status.

How is the moratorium different from the waiting period?

The waiting period limits coverage for listed conditions at the start. The moratorium limits the insurer’s right to contest claims for past non-disclosure after 60 months.