Recently, some insurance companies have started including a rule in the health insurance policy, which has remained hidden from the eyes of the common people. Its name is Material Change section. This rule says that if there is any new change in your health, such as a new disease or treatment, you have to inform your insurer.

Now you will think what is wrong in this? The insurer may increase your premium or change the terms of the policy based on this information. That is, if you inform about a disease like diabetes or blood pressure before renewal, then your pocket can be directly affected.

This rule was not there earlier

Till now a section like Material Change was used in car, home or property insurance, where new information is taken every time during the annual policy renewal. But health insurance is a long-term policy. In this, once the information is given, there is no need for medical examination or declaration again unless you are increasing the sum insured.

This condition is against the rules

According to the rules of insurance regulator IRDAI (Insurance Regulatory and Development Authority of India), no insurance company can increase the premium based on changes in your health, cannot change the terms of the policy, cannot cancel the policy and cannot demand re-medical examination. Therefore if any insurer tries to do this, he is violating IRDAI rules.

Insurers' new move

Some insurance companies have quietly included this Material Change section. Some just ask for information but do not tell what they will do after getting the information. At the same time, some companies clearly say that they can make changes in the policy on this basis, such as reducing the coverage, increasing the premium or excluding some treatments from the policy. However, they do not outright refuse policy renewal as this may put their license at risk.

Misuse of 'Use and File' system?

From 2022, insurance companies have got a system called Use and File, in which they can launch insurance products even without taking prior approval from IRDAI. With this, they are able to include such rules without much questions and answers which can be harmful for the customers.

What should the policyholder do?

Don't panic if your renewal notice mentions 'Material Change'. Seek immediate clarity from the insurance company. If you do not get a satisfactory response, you can lodge a complaint with the insurance company and lodge a complaint on IRDAI's Bima Bharosa Portal or lodge a complaint with the Insurance Ombudsman office. Insurance experts advise that you should avoid giving unnecessary information unless the company specifically asks you for a health update.