Health insurance after IRDAI's rule changes: the clauses that decide a claim

In 2024 IRDAI rewrote a large part of the health insurance rulebook, and most of the changes favour the policyholder. They're worth knowing, but the bigger reason claims get reduced has nothing to do with the new rules. It sits in a few lines of your policy wording that most people never read.

What IRDAI changed

• Pre-existing diseases: the maximum waiting period was cut from four years to three years.
• Moratorium: after five years of continuous cover (down from eight), a claim can't be contested on grounds of non-disclosure, except in cases of proven fraud.
• No upper age limit: insurers can no longer refuse a new policy only because of age.
• Cashless timelines: insurers are expected to decide on a cashless request within one hour, and to give final discharge authorisation within three hours of the hospital's request.

Clause 1: room rent limits

Many policies cap the room you can stay in, either as a percentage of the sum insured or as a type of room. If you stay in a costlier room, the insurer doesn't just withhold the difference in room rent. It reduces many of the other charges in the same proportion.

Take a ₹5 lakh policy with a room rent cap of 1% of the sum insured, or ₹5,000 a day. You take a ₹8,000 room for five days, and the bill is ₹3,00,000, of which ₹1,80,000 are charges linked to the room category, such as doctor visits and nursing.

A policy with no room rent limit, or a cap you'd realistically stay within, avoids this completely.

Clause 2: sub-limits

Some policies cap the payout for specific treatments, such as cataract surgery, joint replacement or certain day-care procedures, regardless of your sum insured. A ₹10 lakh policy with a ₹40,000 cataract limit pays ₹40,000 for cataract surgery, however much it costs.

Look for a list of named procedures with rupee amounts next to them. That list is the sub-limit schedule.

Clause 3: co-payment

A co-payment clause means you pay a fixed percentage of every claim. Some policies apply it to everyone, others only above a certain age, or only in more expensive cities. A 20% co-pay on a ₹4 lakh claim is ₹80,000 from your own pocket.

Clause 4: restoration

Restoration refills your sum insured after it's used up in a policy year. The wording matters:

• Does it restore after the cover is fully exhausted, or after partial use?
• Does it apply to the same illness again, or only to unrelated illnesses?
• Can it be used by every member on a family floater?

The premium is what you see when you buy. The clauses are what you see when you claim.

A five-minute check of your own policy

Open your policy wording, not the brochure, and look for:

1. Any room rent cap, and how it's defined.
2. A sub-limit schedule with rupee amounts.
3. Any co-payment percentage, and when it applies.
4. The waiting periods still left to run on pre-existing conditions.
5. How restoration works on your plan.

If any of these surprise you, that's worth knowing now, before a hospital bill arrives.