Repudiation for Concealed Hypertension Two Years into a Health Policy
Mr. Vikram Shah, 52, bought a ₹15,00,000 individual health policy on 10 January 2022 through an agent. The proposal form asked: 'Have you ever been treated for, or advised treatment for, high blood pressure, heart disease, diabetes or any other ailment?' He answered 'No'. In fact he had been on amlodipine since 2020, a 2021 ECG had shown ST changes, and his physician had advised a stress test which he never did. On 18 March 2024 he was admitted with an acute myocardial infarction, underwent angioplasty with one stent, and the bill was ₹6,80,000. The insurer obtained the hospital's records, found the 2020–21 prescriptions and the ECG, and on 20 May 2024 repudiated the entire claim for suppression of material facts. It did not refund any premium. The policy had been renewed twice without a break and no claim had been made before. Mr. Shah says his agent told him that 'small BP tablets don't need to be mentioned'.
1. Is the repudiation sustainable? Frame your answer around the moratorium and the insurer's procedural duties, not merely 'he lied'.
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Moratorium. Under IRDAI's health-insurance framework a policy enjoys a moratorium of 60 months of continuous coverage, after which no claim may be repudiated on grounds of non-disclosure or misrepresentation except in case of proven fraud. His continuous coverage runs from January 2022 to March 2024 - about 26 months. The moratorium is not reached, so the insurer is not barred from repudiating.
Materiality and nexus. The suppression is not peripheral. Treated hypertension since 2020 and an ECG showing ST changes are direct cardiac risk factors, and the claim is for a myocardial infarction. The concealed facts go to the very risk that materialised, so the nexus test is easily satisfied.
Procedure. Check that the repudiation was communicated in writing with specific reasons, that the insurer relied on the proposal answers, and that investigation was completed. Rejection must be reasoned, not a one-line refusal. Note that rejecting a claim is not the same as voiding the policy: if the insurer treats the contract as void for misrepresentation it must say so, and the wording usually governs refund of premium - a separate point from the claim.
The agent's assurance is no defence. The duty of disclosure rests on the proposer. The agent's statement may be a separate grievance against the agent, but it does not estop the insurer.
2. If the myocardial infarction had occurred in February 2027 instead, on the same continuously renewed policy, would the outcome be different?
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Yes, materially - and the reason is the clock, not the merits.
By February 2027 the policy would have completed more than 60 months of continuous coverage, so the moratorium would bar repudiation for non-disclosure or misrepresentation. The insurer would have to pay unless it could prove fraud - deliberate concealment with intent to deceive - which is a higher standard than showing that a fact was omitted or a question answered carelessly. Proving fraud in a claims setting is difficult, and the burden sits on the insurer.
Two conditions must be respected for this protection to exist at all:
- Continuity. The moratorium counts continuous coverage. A lapse, or a fresh policy with a new insurer without portability credit, resets the clock. This is why the annual renewal premium must be paid on time even when the insured is fit and claim-free.
- The exclusion still applies to non-disclosure only. The moratorium protects against repudiation for non-disclosure; it does not convert excluded events into covered ones, so permanent exclusions and waiting periods still operate.
The correct advice to any client is therefore not 'the insurer will forget after a few years' but 'disclose now, and protect the continuity of the policy you hold'.
3. What should Mr. Shah do now, and what should you do as the agent? Be realistic about the chances.
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For the client - remedies in order of cost:
- Written representation to the insurer's grievance redressal officer, seeking reconsideration and asking for the full reasons and the documents relied on. Realistically, the merits are weak because the nexus is direct.
- Escalation to IRDAI's Bima Bharosa portal if no satisfactory reply within the insurer's stated turnaround.
- Insurance Ombudsman - free, no lawyer needed, and within its monetary jurisdiction, though its award can be contested by the insurer. Beyond that lie the consumer commission and civil suit, mindful of limitation.
- Keep the policy in force if the insurer permits renewal. A lapse destroys the moratorium clock and leaves him uninsured with a now-documented cardiac history.
For the agent:
- Do not promise a reversal. Document what was asked at proposal stage and what you advised, and give Mr. Shah copies of the proposal and any needs-analysis or advice record.
- Never repeat the 'small BP tablets' line. Hypertension, diabetes, cardiac history and any regular medication are material facts on every health proposal - the safe rule is that anything a doctor has prescribed, investigated or advised must appear on the form.
- Report the matter internally as a conduct issue. Advising or colluding in suppression exposes you to IRDAI disciplinary action and destroys the client's cover precisely when it is needed.