Moratorium period in health insurance

What is the moratorium period?

The moratorium period in health insurance is the length of continuous cover after which an insurer loses the right to question the policy or a claim on the ground that the policyholder did not disclose, or misstated, something in the proposal. In India it is 60 continuous months, that is five years, under the IRDAI (Insurance Products) Regulations, 2024. After that point, the only ground on which the insurer can contest is established fraud.

The moratorium gives long-standing policyholders certainty. A person who has kept a policy running for five years should not have a claim refused because of a medical detail missed in the original form.

How the moratorium period works in India

The rule sits in Schedule III of the 2024 regulations, in force from 1 April 2024, and is restated in IRDAI's Master Circular on Health Insurance Business of 29 May 2024:

Points to note:

• It runs on continuous cover. A break in renewal resets the count. Renewal within the grace period does not count as a break.
• Portability and migration carry the credit. The health master circular says credits gained under ported and migrated policies count towards the moratorium, so a customer who switches insurer through portability does not start again.
• It does not remove policy terms. The moratorium stops disputes about disclosure. It does not override the policy's permanent exclusions, sub-limits, co-payments or deductibles. IRDAI's Customer Information Sheet format notes that after the moratorium a policy is not contestable "except for proven fraud and permanent exclusions specified in the policy contract".
• It is separate from waiting periods. A waiting period decides when a known condition becomes payable. The moratorium decides when the insurer can no longer raise questions about what was disclosed.
• Life insurers' health products. The regulation describes the moratorium as applicable to health policies issued by general and health insurers. Life insurance policies, including riders, are covered by the separate time limit in Section 45 of the Insurance Act.

What the moratorium period means for distribution

The moratorium is a strong retention message and a reason to keep customers on their existing policies.

Practical points for advisers and sales teams:

• Use it at renewal. A customer in year four who is thinking of letting the policy lapse should know that one more year of continuous cover brings full protection against disclosure disputes. That is often more persuasive than a premium discount.
• Port, do not replace. If a customer wants a different insurer, portability keeps the moratorium credit. Selling a fresh policy instead resets the five-year clock and exposes the customer to disclosure checks again.
• Explain sum insured increases. Customers who raise their cover should know that the new slice has its own five-year clock. For a customer with known conditions, a large increase brings a new period of exposure on the extra amount.
• It is not a licence to hide conditions. Some customers hear "after five years they cannot reject" and think disclosure does not matter. A claim in the first five years can still be refused for non-disclosure, and fraud is never protected. Honest disclosure at the start remains the only safe approach.
• Track tenure in the customer file. Distributors who record policy start dates and port history can tell customers exactly when their moratorium completes, which helps both renewal and claims conversations.