What is the Moratorium Period in Health Insurance?
In this world, even healthcare costs are going out of control, thus falling ill can be Nobody wants to fall seriously ill or want their loved ones to go through any serious medical conditions. But in case such an unfortunate situation occurs, the last thing you want to think about is piling medical bills which only adds to the stress. In these unexpected and distressing life events, health insurance can prove to be your best friend!
The term "moratorium period" can be a little confusing for some in this health insurance industry. It is a term that may not be as commonly understood as premium, deductible, or coverage. This article talks about the concept of the moratorium period in health insurance. This article aims to explain everything related to the moratorium period in health insurance and other related important information.
Moratorium Period in Health Insurance- The Definition
The moratorium period is the waiting period imposed by the insurance providers during which certain pre-existing medical conditions are not covered. During this period you need to remain free for specific medical conditions or treatments before they can be eligible for the coverage. The duration of this period is been set by the IRDAI which is 8 years.
Purpose of Moratorium Period
The insurance companies issue a moratorium period to prevent the policyholders from purchasing health insurance only when they need immediate coverage for pre-existing conditions. With the enforcement of this moratorium period, the insurer aims to maintain a healthier and more balanced risk pool. This can help them in keeping the premiums manageable for all the policyholders.
How Does the Moratorium Period Work?
Waiting it Out During the moratorium period, you need to maintain continuous coverage for 8 years without any claim. If you can remain free of the specified pre-existing conditions or treatments during this time, then only you are eligible for the coverage of such conditions in the future.
Trigger The moratorium period starts from the date your policy becomes effective. In case the insured person already has some pre-existing medical situation or needs treatment for any specific condition, it will be listed on their policy papers. Any claim related to these conditions will be denied during the moratorium period.
Exceptions and Clauses The potential person is always provided with a copy of their health insurance documents for review before they even opt for it. Like every important decision in life, before choosing you must read the fine print of your health insurance policy. At times, many medical emergencies or fatal situations can be covered by your health insurance if those are related to your pre-existing medical condition.
Why Does the Moratorium Period Matter?
The Moratorium Period is an essential part because of the following reasons-
Protecting the Risk Pool The moratorium period helps maintain a balanced risk pool for the insurance company. Without any waiting period, individuals might purchase insurance only when they need immediate coverage for their pre-existing conditions. This could lead to a higher number of claims and subsequently increased premiums for everyone.
To Manage Costs Having a moratorium period, insurance can better manage costs. It allows them to predict and allocate resources more effectively. This way they can analyze certain high-cost conditions that would not be immediately covered, hence the decisions will be better.
Legal Requirements It is a legal requirement for the insurance providers to impose a moratorium period. In some regions, this emphasizes the importance and significance of this waiting period in the health insurance company and industry.
How to Navigate the Moratorium Period?
There are a few steps you can take to get to know about the moratorium period against your policy-
Read your Policy Carefully It is suggested that you should thoroughly read your health insurance policy. Understand the conditions and treatments that are subjected to this waiting period, and take note of anything exceptional you see.
Plan for the Future If there is any pre-existing condition that you are suffering from or any need for certain treatment you are thinking of, it is crucial to plan for the moratorium period. Make sure to maintain continuous coverage and explore the options for temporary coverage of these conditions.
Ask the Expert Understanding the terms and conditions of health insurance is kinda complex. Call your expert and seek guidance from them. They will guide you in a better way.
A moratorium period is the best alternative method of dealing with pre-existing conditions which does not require you to disclose any medical histories when you opt for the policy. Like everything else in insurance, even a moratorium period has its pros and cons. So it is suggested to read out the policy thoroughly before opting for the policy and moratorium period.