Moratorium Period in Health Insurance: Meaning & Benefits

The moratorium period in health insurance refers to a fixed duration during which an insurer may deny claims related to specific conditions due to nondisclosure or pre-existing ailments. However, once this period ends, all claims—even those linked to undisclosed pre-existing conditions—must be honoured, provided the policy has been continuously renewed.

Introduced by the IRDAI to protect long-term policyholders, the moratorium period builds trust between insurers and customers. With comprehensive health insurance plans from providers like Bajaj Allianz General Insurance Company, policyholders can benefit from this clause, ensuring lifelong coverage without repeated health declarations.

What is a Moratorium Period?

A moratorium period is a time-bound clause in health insurance where the insurer can reject claims linked to nondisclosed or pre-existing conditions. Once this period is over, typically five years, such claims must be accepted if the policy was uninterruptedly renewed. It protects consumers from lengthy disclosures and ensures claim assurance in the long term.

Why is the Moratorium Period Important in Health Insurance?

The moratorium period provides critical protection for both insurers and policyholders. For insurers, it safeguards against fraudulent or non-transparent disclosures. For policyholders, especially those with chronic conditions, it offers a clear path to long-term, dispute-free coverage.

Once the moratorium period concludes, even claims for pre-existing diseases that weren’t disclosed will be eligible for coverage—provided there was no fraud and the policy was renewed continuously for five years. This enhances consumer confidence and simplifies claim settlements in the long run.

IRDAI introduced this provision to make health insurance more accessible and transparent. It minimises the chances of claim rejection and assures policyholders that past oversights won’t affect future claims if they maintain their policy diligently. When choosing plans from Bajaj Allianz General Insurance Company, this feature adds immense value, especially for those planning long-term healthcare security.

Benefits of Moratorium Period in Health Insurance

• Claim Assurance Post 5 Years: Once the moratorium period ends, all claims—except for proven fraud—must be honoured, regardless of any past non-disclosure.
• Simplifies Policy Renewal: Continuous renewal is rewarded, encouraging policyholders to maintain coverage without disruption.
• Boosts Trust: Reduces worries about claim rejections for old conditions, leading to better policyholder confidence.
• Ideal for Elderly/Chronic Patients: Offers long-term peace of mind even if health declarations were incomplete at the start.
• Supports IRDAI’s Consumer First Approach: Encourages fair and transparent handling of claims.

Duration of Moratorium Period as per IRDAI Guidelines

As per the Insurance Regulatory and Development Authority of India (IRDAI), the moratorium period lasts five continuous years of policy renewal. After this period, no health insurance claim shall be contestable—except in cases of fraud or proven misrepresentation. It is applicable across all individual and family floater policies regulated by IRDAI.

Also Read: New IRDAI Health Insurance Guidelines in 2025

What is the Purpose of the Moratorium Period?

The moratorium period aims to promote transparency and reduce disputes between insurers and policyholders. It reassures customers that minor or accidental omissions at the time of buying the policy won’t affect their claims forever. As long as there’s no fraud and premiums are paid regularly, the insurer must honour claims after five years. This consumer-centric approach improves trust in long-term health insurance products.

How Does the Moratorium Period Work?

From the policy start date, the moratorium period is calculated as a continuous five-year span. During this time, the insurer may deny claims linked to past undisclosed illnesses. But once the five years are completed without a break in renewal, the insurer can no longer reject such claims—unless there is clear evidence of fraud. This ensures coverage becomes unconditional post this period.

Conditions Applicable During the Moratorium Period

• The moratorium is valid only if the policy is renewed without breaks for five years.
• It applies to non-disclosed or misrepresented illnesses, not to new conditions arising after policy purchase.
• Fraud or intentional misrepresentation voids this protection.
• It is governed by IRDAI guidelines and is not a replacement for the initial waiting period for new diseases or PEDs.

What Happens After the Moratorium Period Ends?

Once five continuous years have passed, the insurer cannot deny a claim based on pre-policy non-disclosure—unless the case involves fraud. This makes all future claims admissible, streamlining the claims process. It provides policyholders with lifetime protection and financial peace of mind, particularly if they’ve chosen reliable plans like those from Bajaj Allianz General Insurance Company.

Difference Between Moratorium Period and Pre-existing Disease Waiting Period

• Pre-existing Disease (PED) Waiting Period: Typically lasts 2–4 years. During this time, claims for disclosed PEDs are not covered.
• Moratorium Period: Lasts 5 years. After this, claims can’t be rejected even for undisclosed conditions (unless fraud is involved).

In summary, the PED waiting period is about when you can claim, while the moratorium is about whether an old condition can be contested.

Key IRDAI Regulations on Moratorium Period

• Valid after 5 years of uninterrupted coverage.
• Applies to all retail and family floater health policies.
• Cannot reject claims after the period, except in proven fraud.
• Applicable across all IRDAI-licensed health insurers.
• Promotes a consumer-first approach with long-term claim certainty.

Also Read: 5 Possible Health Insurance Claim Rejection Scenarios

Things to Consider While Choosing a Health Policy with a Moratorium Period in India

• Check renewal flexibility: Ensure your plan allows seamless renewals to avoid moratorium disruption.
• Go with trusted insurers: Brands like Bajaj Allianz General Insurance Company are known for transparent claim practices.
• Understand the claim process: Know what is and isn’t covered during and after the moratorium period.
• Look beyond premiums: A slightly higher premium is often worth long-term claim assurance.
• Assess PED clauses separately: Don't confuse moratorium with waiting periods for declared conditions.

By keeping these points in mind, you can maximise the benefits of the moratorium feature and ensure lifelong, stress-free health coverage.

FAQs

Is the moratorium period same as the waiting period?

No. The waiting period applies to specific diseases from the start, while the moratorium period is about claim contestability after five years.

Can I file a claim during the moratorium period?

Yes, but claims related to undisclosed conditions can be contested by the insurer during this time.

What are IRDAI rules regarding moratorium in health plans?

After five years of uninterrupted coverage, no claim can be rejected based on non-disclosure unless it involves fraud.

Does the moratorium period apply to all health insurance plans?

Yes, it applies to all individual and family floater health policies governed by IRDAI.