Portability, pre-existing disease waiting period and a non-disclosure trap

No. Under the IRDAI (Health Insurance) Regulations, 2016 and the portability framework, a policyholder who ports from one insurer to another is entitled to credit for continuous coverage with the previous insurer. The new insurer cannot impose a fresh pre-existing disease waiting period for the period already served with the previous insurer. Farah had 3 years and 2 months of continuous coverage, and if the original policy's pre-existing disease waiting period was, say, three years, that waiting period was already served before portability. The new insurer may apply its own waiting period only for the unserved balance, if any, and must count the previous coverage. Therefore Q's blanket statement that portability carries no waiting-period credit is wrong. However, portability does not protect a policyholder from the consequences of a fresh material non-disclosure in the portability proposal. The waiting-period argument and the non-disclosure argument are separate; Q cannot use the first to justify rejection, but it may still rely on the second if the facts support it.

The non-disclosure must be assessed against the questions actually asked and the materiality of the condition. Insurer Q asked specifically about pre-existing disease. A thyroid nodule diagnosed in 2023, with medication and specialist consultations, is a known medical condition and should have been disclosed if the question covered it. Farah's claim that she did not understand the term is not a strong defence: the proposal form and the agent should have explained it, and a reasonable person would understand that a diagnosed nodule is a disease. If the insurer proves that the answer was false and that the information was material to underwriting, it may repudiate or avoid the policy within the permitted period. However, the breast cancer is not automatically excluded merely because a different condition was concealed. The insurer must show the materiality of the thyroid nodule and comply with the policy's moratorium and claims-handling rules. The agent should not assume that every non-disclosure defeats every unrelated claim; the correct test is inducement and materiality, not the mere existence of an undisclosed ailment.

The health insurance regulations provide a moratorium period of five continuous years, after which the insurer cannot contest the policy or repudiate a claim on the ground of misrepresentation or non-disclosure, except in cases of proven fraud. The moratorium counts continuous coverage, including portability credit, so Farah's 3 years and 2 months with P plus about 5 months with Q total roughly 3 years and 7 months. She is still inside the five-year moratorium, so Q may examine the non-disclosure. The six-month timing is not by itself a valid ground for rejection. There is no rule that a health claim made within six months is automatically invalid; the insurer must apply the waiting periods, exclusions and disclosure rules. If breast cancer is not a pre-existing disease and the waiting period is served, the timing does not defeat the claim. The agent should advise Farah to request the rejection in writing, obtain the policy and proposal copies, and use the insurer's grievance redressal and the Insurance Ombudsman route if the non-disclosure finding is disputed.