Material Change Clause in Health Insurance – A Powerful Guide to Your Rights Under IRDAI Rules
Introduction: Understanding the Material Change Clause in Health Insurance
The Material Change Clause in Health Insurance has recently become a point of concern for many policyholders across India. Several insurers have begun including this clause in their policy wordings, especially during renewal cycles, prompting doubts about whether insurers can use new health information to increase premiums, add exclusions, or even deny renewal.
With IRDAI continuously working to strengthen policyholder rights and standardise health insurance practices, it’s important to understand what this clause actually means, when it applies, and what your rights are.
This blog provides a comprehensive, people-friendly explanation of the Material Change Clause in Health Insurance, how insurers are using it, and the protections available to you under IRDAI rules.
What Is the Material Change Clause in Health Insurance?
The Material Change Clause in Health Insurance refers to a policy condition that asks policyholders to disclose any new health condition, illness, or lifestyle-related change at the time of renewal.
This covers new diagnoses that occur after purchasing the policy, such as:
- Diabetes
- Hypertension
- Asthma
- Thyroid disorders
- Heart conditions
- Lifestyle-related diseases
- Mental health diagnoses
The intention, as stated by insurers, is to ensure updated records. However, the clause has led to confusion because many policyholders fear that this information may be used to alter premiums or reject renewals.
Importantly, not all insurers have adopted this clause, and those that have included it do so with slight variations.
Which Insurers Have Introduced the Material Change Clause in Health Insurance?
According to a review by Beshak.org, several insurers have introduced the Material Change Clause in Health Insurance across different products. These include:
- ICICI Lombard – Elevate, Health AdvantEdge
- Acko – Standard, Platinum Health Insurance
- SBI General – Health Edge, Super Health, Arogya Supreme
- ManipalCigna – Lifetime Health India
- Reliance General – Health Gain
- Raheja QBE
- Zuno General Insurance
This insertion has triggered important questions for policyholders, especially regarding premium hikes, fresh underwriting, and claim denials.
Can Insurers Increase Premiums Because of the Material Change Clause?
This is one of the biggest misconceptions among policyholders.
The short answer is: No, insurers cannot increase your premium merely because you disclose a new health condition at renewal.
Industry leaders have clearly stated this.
Expert View: ACKO
Nitin Gupta, Senior VP – Health Underwriting & Claims at ACKO, clarifies:
“Customers don’t need to inform the insurer about new illnesses if they’re just renewing the same policy. Only when a customer requests a change in coverage may medical details be asked.”
He further adds:
“Insurers cannot increase premiums, add exclusions, or reduce coverage due to a newly diagnosed illness. Lifelong renewability rules prohibit this.”
Expert View: ZUNO General Insurance
Nitin Deo, CTO at Zuno General Insurance, confirms:
“Any revision in rates must be part of an approved product filing and applied uniformly to all policyholders, not on an individual basis.”
ICICI Lombard’s Official Statement
ICICI Lombard has also confirmed that:
“A policyholder’s premium or coverage will NOT be altered due to the material change clause.”
This means insurers cannot use new medical information as a basis to increase your premium during renewal of the same policy.
Can Non-Disclosure of a New Disease Lead to Claim Rejection?
This is another pressing concern. Many policyholders worry that not disclosing a new illness during renewal might lead to claims being denied later.
Here too, the rules are clear.
Under IRDAI Regulations:
- Claims cannot be rejected simply because you did not disclose a new health condition during renewal.
- Policy cancellations cannot be done for this reason either.
- Exceptions apply only in cases of proven fraud or intentional misrepresentation.
Expert View: ZUNO
Deo reiterates:
“Claims or policies cannot be cancelled merely because a new condition was not disclosed at renewal—unless there is proven fraud.”
ICICI Lombard’s Confirmation
ICICI Lombard has publicly stated:
“No claim has ever been rejected due to the material change clause.”
Thus, non-disclosure of a new medical condition does not automatically put your policy at risk. As long as you have not provided false information at the time of buying or upgrading the policy, you are protected.
When Can an Insurer Conduct Fresh Underwriting?
Fresh underwriting refers to a detailed reevaluation of your health profile.
Under IRDAI rules, insurers cannot conduct fresh underwriting every year.
Fresh underwriting is allowed only in the following situations:
1. When You Increase Your Sum Insured
If you request a higher coverage amount, the insurer may underwrite only the increased portion.
2. When You Add Riders or New Benefits
Adding features such as:
- Critical illness rider
- Maternity rider
- Room rent waiver
- Hospital cash benefit
may trigger underwriting.
3. Adding New Family Members
Adding a spouse, newborn, or parent to the policy can require fresh underwriting.
4. Portability to a New Insurer
When you port your policy, the new insurer has the right to evaluate your health declarations.
Expert View: IFFCO Tokio
Niharika Singh, ED – Marketing at IFFCO Tokio, agrees:
“Fresh underwriting may be required only if there is a change in the level of risk accepted by the insurer.”
Outside these situations, insurers cannot re-evaluate your health details, even if you disclose something new.
IRDAI Regulations That Protect You – Lifelong Renewability Rules
The Material Change Clause in Health Insurance cannot override IRDAI rules.
The most crucial protection available to policyholders is lifelong renewability.
According to IRDAI’s Master Circular on Health Insurance (29 May 2024):
✔ A health insurance policy must be renewed for life unless:
- Proven fraud
- Non-disclosure at the time of purchase
- Misrepresentation of information
✔ Insurers cannot refuse renewal because the policyholder made claims in previous years.
✔ Insurers cannot introduce fresh underwriting unless sum insured is increased.
This essentially means:
➡️ Even if the Material Change Clause is included in the policy wording, insurers cannot use it to violate IRDAI regulations.
➡️ Policyholders can challenge any unfair use of this clause.
Should Policyholders Disclose Newly Diagnosed Diseases During Renewal?
Experts collectively advise:
✔ You are NOT required to disclose newly diagnosed conditions at renewal.
✔ Disclosure is required only when:
- You upgrade coverage
- You increase sum insured
- You add benefits
- You add family members
- You port to a new insurer
IFFCO Tokio’s View
Singh explains:
“There is no mandatory requirement under IRDAI guidelines to proactively inform insurers about newly diagnosed diseases during an ongoing policy.”
This advice is consistent across insurers and regulatory interpretations.
What Policyholders Should Do When Facing the Material Change Clause
Here are practical steps you can follow during renewal:
1. Read Your Policy Document Carefully
Check whether your insurer has included the Material Change Clause in Health Insurance.
2. Do Not Disclose New Illnesses Unless You Are Upgrading
Disclosure is only needed when risk changes due to an upgrade.
3. Renew Your Policy on Time
Renewal delays can complicate matters—even minor health changes can then trigger underwriting.
4. If the Insurer Asks Health Questions During Standard Renewal, You Can Decline
Politely state that IRDAI rules prohibit fresh underwriting during regular renewals.
5. Keep Evidence Ready
Save:
- Renewal reminders
- Email communications
- Screenshots of unfair requests
These help if you need to file a complaint.
6. Escalate If Needed
You may escalate disputes to:
- Grievance Redressal Officer of the insurer
- IRDAI’s IGMS platform
- Insurance Ombudsman (if unresolved)
Regulations strongly support policyholders in such cases.
Conclusion: Know Your Rights and Stay Protected
As discussions intensify around the Material Change Clause in Health Insurance, it is important for policyholders to understand that:
- Insurers cannot change premiums due to new illnesses.
- Claims cannot be denied simply for non-disclosure at renewal.
- Fresh underwriting is allowed only when coverage changes.
- IRDAI’s lifelong renewability rules override this clause.
In essence, the Material Change Clause cannot be used to penalise you. As an Indian policyholder, your rights under IRDAI regulations are clear, strong, and enforceable.
The best approach is to renew policies on time, stay informed, and assert your rights whenever necessary.
Based on recent developments reported by Economic Times.
