Health Insurance Renewal Rules: Are you worried about premium increases for new illnesses? What are the rules?

Health insurance policies are often available for a year, or sometimes even longer. Therefore, it's crucial to renew them every year before the policy expires. However, many people become concerned when, at the time of renewal, the insurance company asks whether there have been any changes to their health or lifestyle over the past year.

This question leaves many wondering if the company is using this information to increase premiums or refuse to renew the policy. Recently, the discussion surrounding the "material change" clause has intensified, as some insurance companies have begun including it in their policy documents.

According to an ET report, this clause has been found in some policies of companies like ICICI Lombard, Acko, SBI General, ManipalCigna, Reliance General, Raheja QBE, and Zuno General Insurance. So, let's understand what this clause is, what its implications are, and what your rights are according to IRDAI?

What is a 'material' clause?
Simply put, if you've discovered a new illness or health condition after purchasing a policy, some companies may ask you to disclose it during renewal. But could disclosing this information increase your premium or lead to policy changes? Let's find out further.

Can disclosing a new illness increase your premium?
There's a lot of confusion about this, but experts clearly state that no, it doesn't. According to Nitin Gupta, Senior VP at Acko, if you're simply renewing a policy, there's no need to disclose a new illness. Health information may only be asked if you're expanding coverage, such as increasing the sum insured or adding a new rider.

He further explained that the insurer cannot increase your premium due to a new illness. They can neither add any exclusions nor reduce coverage.

Can a claim be rejected if you don't disclose a new illness?
This is the biggest fear in people's minds. But a claim cannot be rejected simply because you haven't disclosed a new illness.

When can new underwriting (new health information verification) be done?
According to IRDAI rules, new underwriting cannot be done unless you increase the sum insured. According to experts, this can happen if you increase the sum insured, add a new rider, add new family members, or port to another company.

Important IRDAI Rules: According to the Master Circular of May 29, 2024, it is mandatory to make a health policy lifelong (unless there is fraud or misrepresentation). Renewal cannot be denied due to claim history. New underwriting cannot be done without increasing the sum insured. This means that even if the company includes a material change clause, IRDAI rules apply.

What should policyholders do?

Policyholders don't need to disclose a new condition if they're simply renewing. Disclosure of a new condition will not result in a premium increase, a coverage change, or a claim rejection. Only disclose this information if you're making an upgrade to your policy.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.