India: Health insurers barred from contesting claims after 8 years of premium payments

| 19 Jun 2020

Health insurance companies will not be allowed to contest claims once the premiums on a policy has been paid for a continuous period of eight years, the IRDAI states in new guidelines on indemnity based health insurance.

The guidelines, titled Standardisation of General Terms and Clauses in Health Insurance Policy Contracts, state among other measures, “After completion of eight continuous years under the policy, no look-back is to be applied. This period of eight years is called the moratorium period.”

“After the expiry of the moratorium period, no health insurance claim shall be contestable except for proven fraud and permanent exclusions specified in the policy contract. The policies would however be subject to all limits, sub limits, co-payments, and deductibles as per the policy contract.”

The IRDAI said the objective of the guidelines is to standardise the general terms and clauses in indemnity based health insurance (excluding personal accident and domestic/overseas travel) products by simplifying the wordings of general terms and clauses in the policy contracts and ensure uniformity across the industry.

The guidelines also state, “If any claim made by the insured person, is in any respect fraudulent, or if any false statement, or declaration is made or used in support thereof, or if any fraudulent means or devices are used by the insured person or anyone acting on his/her behalf to obtain any benefit under this policy, all benefits under this policy and the premium paid shall be forfeited.

“Any amount already paid against claims made under the policy but which are found fraudulent later shall be repaid by all recipient(s)/policyholder(s), who has made that particular claim, who shall be jointly and severally liable for such repayment to the insurer.”

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