Almost everything written about health insurance in India is about buying it. Very little is about the four hours that decide whether the policy was worth having: the hours between a hospital sending a pre-authorisation request and someone at the discharge desk saying the approval has not come through.
Those hours are regulated. Specifically and numerically. Most policyholders standing at that desk do not know it.
The circular that put clocks on it
The rules come from the Master Circular on Health Insurance Business, reference IRDAI/HLT/CIR/PRO/84/5/2024, dated 29 May 2024. It is addressed to all general insurers, health insurers and life insurers, and it consolidated a long list of earlier circulars into one document.
Three of its provisions are worth knowing by heart.
One hour to decide a cashless request
The wording is direct: the insurer shall decide on the request for cashless authorization immediately but not more than one hour of receipt of request. Insurers were required to have the systems and procedures in place for this immediately, and no later than 31 July 2024.
The circular also allows insurers to run dedicated help desks at hospitals in physical form, and requires pre-authorisation to be provided to the policyholder through digital mode as well, so you should be able to see the decision yourself rather than relying on the hospital to relay it.
One hour is a short enough window that everyone in the room can time it. That is the point of writing it as a number.
Three hours to let you go home
The second clock starts at discharge. The insurer shall grant final authorization within three hours of the receipt of discharge authorization request from the hospital, and the circular adds a sentence with no wriggle room in it: in no case shall the policyholder be made to wait to be discharged from the hospital.
Then comes the part that gives it teeth. If there is any delay beyond three hours, the additional amount charged by the hospital shall be borne by the insurer from the shareholder's fund.
Two words in that clause are doing real work. Shareholder's fund means the cost of the delay comes out of the insurer's own money, not out of the pool of premiums collected from policyholders. An insurer that runs late pays for it itself.
There is also a provision for the worst case. If the policyholder dies during treatment, the insurer must immediately process the claim settlement request and get the mortal remains released from the hospital immediately. Families have been held at hospital billing counters in exactly that situation; the circular addresses it directly.
Sixty months, after which the argument is over
The third provision is the most valuable and the least known, because it only matters years after the policy is bought.
Under the heading "Policy/Claim cannot be contested", the circular states that no policy and claim of health insurance shall be contestable on any grounds of non-disclosure and/or misrepresentation except for established fraud, after the completion of the Moratorium Period, i.e. 60 months of continuous coverage.
Five years of continuous cover and the disclosure argument is closed. Not narrowed: closed, with the single exception of fraud that the insurer establishes.
And the credits carry. The circular notes that accrued credits gained under ported and migrated policies count towards calculating the moratorium period, so changing insurer does not reset the clock if the port is done properly. The same is true of the specific waiting periods and the pre-existing disease waiting period, which transfer along with the sum insured and no claim bonus.
This is the single strongest reason not to let a health policy lapse for the sake of one missed renewal. The grace period is fifteen days where premium is paid monthly, and the credits are what you are protecting when you use it.
A claim cannot be rejected by one person
The circular also changes who is allowed to say no.
No claim shall be repudiated without the approval of the Product Management Committee or a three-member sub-group of it called the Claims Review Committee. If a claim is repudiated or partially disallowed, the details must be conveyed to the claimant with full details giving reference to the specific terms and conditions of the policy document.
So a rejection letter that says "not payable as per policy terms" and stops there is not what the circular describes. You are entitled to know which clause, and why it applies to you.
The paperwork burden moved as well: insurers and third party administrators shall collect the required documents from the hospitals, and the policyholder shall not be required to submit the documents. If you are being asked to chase discharge summaries between an insurer and a hospital, that is not how it is meant to work.
That is the health side, where the protection is procedural: a committee has to agree, and it has to tell you which clause it relied on. A life policy has a blunter rule of its own. Under Section 45 of the Insurance Act, once three years have passed the insurer cannot call the policy in question on any ground whatsoever — not misstatement, not non-disclosure, not fraud. Different Act, different product, and no committee required.
If you hold more than one policy
A practical provision that saves an argument between insurers at your expense. Under an indemnity policy, you choose which policy to claim under, and that insurer becomes the primary insurer. If the coverage available under it is less than the admissible claim, the primary insurer must seek details of your other policies and coordinate with the other insurers to settle the balance, "without causing any hassles to the policyholder".
For benefit-based policies, which pay a defined sum rather than reimbursing costs, you can claim from all insurers under all policies.
If you or a parent is 70 or over, there may also be cover you have not counted. The Ayushman Vay Vandana Card gives every citizen aged 70 and above ₹5 lakh of cover regardless of income, and holding a private health policy does not disqualify you from it.
"Cashless Everywhere" is a different thing, and not an IRDAI rule
Search for cashless rules and you will meet the phrase Cashless Everywhere, usually attributed to IRDAI. It is worth separating, because the two are not the same instrument and they do not carry the same weight.
Cashless Everywhere was announced by the General Insurance Council on 24 January 2024, four months before the Master Circular. The Council is the industry body for general insurers, not the regulator. What it announced was a commitment by its member insurers, arrived at in consultation with them, to extend cashless treatment to hospitals outside the insurer's own network, so that the choice of hospital stops depending on whether a particular insurer has signed a tariff agreement with it.
The conditions attached to it are the Council's and the insurers', not a regulator's:
| Cashless Everywhere | The Master Circular | |
|---|---|---|
| Who issued it | General Insurance Council, an industry body | IRDAI, the regulator |
| What it is | A commitment by member insurers | A binding circular on all insurers |
| What it governs | Where you can go cashless | How fast the insurer must answer |
| If it is not honoured | No stated penalty | Ombudsman route, with ₹5,000 a day for non-compliance with an award |
In practice the Council set out that a hospital needs a minimum of 15 beds and registration with the state health authority to be used this way, that elective admissions should be notified to the insurer at least 48 hours before, and that emergency admissions should be notified within 48 hours of admission. Treatment remains subject to your policy's own terms and to the insurer's operating guidelines, which is where most of the real variation lives.
The practical reading: Cashless Everywhere widens the list of hospitals where you can ask. The Master Circular is what puts a clock on the answer. If an insurer declines cashless at a non-network hospital, that is a matter for its own guidelines; if it sits on a request for three hours at any hospital, that is the circular, and the escalation route below applies.
Every deadline in one place
The Master Circular sets several clocks running, and they are easier to hold on to together than scattered through a document. Each one is a duty on the insurer, with a stated consequence.
| What | The limit | What happens if it is missed |
|---|---|---|
| Decision on a cashless authorisation request | Immediately, and no more than 1 hour from receipt | Systems to deliver this were required by 31 July 2024 |
| Final authorisation at discharge | 3 hours from the hospital's discharge request | The hospital's additional charge for the delay is borne by the insurer, from its shareholder fund |
| Continuous cover before a policy becomes non-contestable | 60 months | After that, no claim can be contested for non-disclosure except on established fraud |
| Grace period where premium is paid monthly | 15 days | Continuity credits are preserved if premium is paid inside it |
| Insurer compliance with an Insurance Ombudsman award | 30 days from receipt of the award | ₹5,000 per day payable to the complainant, plus penal interest under the Insurance Ombudsman Rules, 2017 |
| Your right to cancel | 7 days' notice, any time in the term | Proportionate refund for the unexpired period, where the term is up to a year and no claim has been made |
The first two are the ones to know by heart, because they are the only ones you will ever need while standing at a discharge desk.
What to do when the clock is missed
The obligations above sit on the insurer. Enforcing them is on you, and the route is short.
- Note the time the request was sent, and ask the hospital's insurance desk for the timestamp. Everything downstream depends on it.
- Raise it with the insurer's grievance redressal team. The circular requires their response letter to include the contact details of the relevant Insurance Ombudsman.
- Escalate to IRDAI's Bima Bharosa grievance portal if the response is unsatisfactory.
- Go to the Insurance Ombudsman. The insurer must comply with an award within 30 days, and a penalty of ₹5,000 per day is payable to the complainant if it does not, on top of penal interest under the Insurance Ombudsman Rules, 2017.
That daily penalty is the bit worth remembering. It is one of the few consumer remedies in Indian financial services that compounds against the institution rather than the individual.
Two other entitlements in the same circular
A 30-day free look period from the date you receive the policy document, for policies with a term of one year or more, during which you can cancel if you are not satisfied with the terms.
Cancellation on seven days' notice at any time during the term, with a proportionate refund of premium for the unexpired period where the policy term is up to one year and no claim has been made.
Neither is a reason to buy a policy. Both are reasons to read the document when it arrives rather than filing it.
Two things worth reading alongside them, because they bear on the same policy from the other end: the premium on an individual health policy has carried no GST since 22 September 2025, while employer group cover still does, and where the old tax regime applies, what you can deduct for that premium is set out in the guide to Section 80D.
What to have ready before a claim
- The date your continuous coverage started. Sixty months from that date is when the disclosure argument closes.
- Whether a port reset anything. Accrued credits should have carried; confirm they did.
- Your insurer's grievance and Ombudsman contacts, before you need them rather than after.
- Any rejection letter, for a specific clause reference. A general statement is not what the circular requires.
- Whether you are being asked to collect documents the insurer is supposed to collect.
This article summarises what IRDAI's Master Circular requires of insurers and is general information for an Indian audience. It is not insurance, legal or financial advice. Your own policy wording, the product regulations and the circulars in force at the time govern a claim, and entitlements can depend on facts this article does not cover. Take a disputed claim to your insurer's grievance officer and, if necessary, the Insurance Ombudsman.
Sources
- IRDAI: Master Circular on Health Insurance Business, 29 May 2024 (opens in a new tab)
- IRDAI: Insurance Products Regulations, 2024, under which the circular is issued (opens in a new tab)
- IRDAI: Consolidated and gazette notified regulations (opens in a new tab)
- IRDAI: Bima Bharosa grievance portal (opens in a new tab)
- IRDAI: Regulations and circulars (opens in a new tab)
- Council for Insurance Ombudsmen (opens in a new tab)
- General Insurance Council: newsletter describing the Cashless Everywhere launch of 24 January 2024 (opens in a new tab)
This article is general information for an Indian audience and reflects the IRDAI Master Circular on Health Insurance Business published at the date of review. It is not insurance, legal or financial advice. Circulars and regulations are revised, individual policy wordings differ, and only your own policy document and the rules in force govern a claim. Confirm the current position with IRDAI or your insurer before relying on any of this. Last reviewed 16 September 2026.
