Do you know this rule of health insurance? Know how you can avoid increased premium and claim rejection

Do you also fear that if a new disease develops after taking the policy, your health insurance company will increase the premium or refuse to pay the claim? Your concern is related to a special rule of the health insurance policy, which is called ‘Material Change’ clause. This clause says that if you suffer from any serious illness, you have to inform your insurance company about it.

However, experts say that insurance companies cannot act arbitrarily using this rule as an excuse. Insurance Regulatory and Development Authority of India (IRDAI) regulations protect you and guarantee frequent renewal of the policy.

What is this ‘material change’ clause?

This rule simply says that if the policyholder develops any new disease or there is any major change in his health, he should inform the insurance company about it. Based on this information, the company can make changes in the terms and premium of its policy, but this change should not be applicable to any one person but should be applied simultaneously and equally to all the customers taking that policy.

How do IRDAI rules help you?

IRDAI’s instructions clearly state that no insurance company can stop the renewal of your policy or increase the premium just because you have made a claim. Even if the company wants to increase the premium, it will have to do this increase simultaneously for all its customers and for this, the approval of IRDAI will also have to be taken first. No company can target any one customer.

What to do if the company increases the premium or rejects the claim?

Experts advise that if your insurance company talks about increasing the premium or changing the policy terms, then you should not panic. Here are the steps you should take:

1. Ask for written information: Ask for complete information about the change from the company and proof of approval from IRDAI in writing.
2. Complain: If you feel that the company is doing something wrong, you can immediately file a complaint with IRDAI or Insurance Ombudsman.
3. Port the policy: You also have the option to port your policy to another company. This will keep your cover intact and save you from unfair terms.

Then why has this rule been made?

Insurance companies say that this rule encourages people to be conscious of their health and adopt a healthy lifestyle, and not to penalize them. But IRDAI has made it clear that increasing premium at individual level or stopping renewal of policy on the basis of any new disease is against the rules.

So, the next time you buy or renew health insurance, understand this ‘material change’ clause very well, so that you do not have to face any problems or sudden increase in expenses in future.