What is the 'material change' clause in health insurance policies?

The 'material change' clause requires IRDA-regulated health insurance policyholders in India to report any major changes in their health or lifestyle at the time of policy renewal.

Can insurers use the 'material change' clause to hike premiums for individual policyholders?

No, according to experts, insurers are not allowed to change premiums or alter coverage at renewal unless the changes are applied uniformly across all customers.

What happens if a policyholder does not disclose a new illness under the 'material change' clause?

Experts say non-disclosure alone cannot justify claim rejection, unless there is proven fraud or deliberate misrepresentation by the policyholder.

Home / Business and Economy / Insurers' 'Material Change' Clause Raises Concerns Over Claim Rejections and Premium Hikes

Insurers' 'Material Change' Clause Raises Concerns Over Claim Rejections and Premium Hikes

17 Nov

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Summary

Insurers now require annual health/lifestyle updates from policyholders
Experts say IRDA rules prohibit claim-based loading and fresh underwriting
Nondisclosure alone cannot justify claim rejection, unless proven fraud

Insurers' 'Material Change' Clause Raises Concerns Over Claim Rejections and Premium Hikes

As of November 2025, health insurance renewals in India have become more complex, with many insurers now including a "material change" clause. This clause requires policyholders to report any major changes in their health or lifestyle at the time of renewal.

According to industry experts, the purpose of this clause is to help insurers keep policies fairly priced for all customers, as new health risks can impact the overall pricing pool. However, this has left many policyholders concerned about potential misuse, such as insurers using the disclosures to increase premiums, add exclusions, or reject claims.