What is the health insurance moratorium period? How is it different from a free viewing period or waiting period?
— Name withheld upon request
The moratorium period is also called the retrospective period in insurance. This is a built-in protection clause for policyholders. After the moratorium period, insurers cannot reject a claim on the basis of non-disclosure or misrepresentation. To deny a claim, insurers must demonstrate a case of fraud.
In health insurance claims under personal policies, insurers often question disclosures made by policyholders at the application stage. This applies especially to chronic diseases such as diabetes, blood pressure and arthritis. Many policyholders don’t necessarily keep health records, so they disclose information on the application form based on the best information available. When a claim is filed, insurers carefully review these disclosures. They typically match these disclosures to any comments the treating physician makes in the discharge summary. Any changes to disclosures will lead to claim disputes. Once the moratorium period expires, insurers lose the right to reject claims for this reason. It also increases the obligation on insurers to conduct a thorough risk assessment at the proposal stage, before accepting premium payment. Earlier, the moratorium period was eight years, but it was recently reduced to five years.
The free viewing period is the initial period after receiving your policy document. During this period, the policyholder can read the content of the policy and decide to cancel it. In such a case, the insurer is obliged to refund the full premium. Insurers can only deduct the risk premium for the insurance period and administrative costs such as health insurance. The free viewing period also serves as a safeguard for policyholders to limit unfair sales. If the terms of the policy are not as agreed at the proposal stage by the insurance agent or company, the policyholder may cancel the policy. The policyholder is not obliged to justify his decision. In health insurance, the deadline for a free inspection is 30 days from the date of receipt of the policy document.
The grace period is the period after which a claim becomes due for a specific condition. For example, health insurance policies typically provide a waiting period for pre-existing conditions. Claims under the policy can only be made for claims related to pre-existing conditions after the policy has been continuously renewed during the waiting period. The actual waiting period for pre-existing conditions may vary by insurer and product. It used to be between one and four years. However, under a recent regulation, the maximum withdrawal period for pre-existing conditions is now confined to three years. Therefore, insurers are obliged to pay claims for pre-existing conditions after this period, unless they have included a specific constant exclusion clause.
Abhishek Bondia is the CEO and Managing Director of SecureNow.in
Posted: Apr 25, 2024 4:05 pm EST
