Say for instance you’ve been suffering from diabetes from ever since you were in your teens. You are unsure or entirely unaware of the implications of this condition on the cost of health insurance policy and as a result, you procrastinate buying it for quite some time.
You wouldn’t be the only one. A multitude of individuals neglect or delay buying health insurance despite having pre-existing medical conditions. Read on to know why that is not a prudent financial decision.
Meaning of pre-existing condition
While many of us know what health insurance is, we may be unclear what a pre-existing condition is. Thanks to the 2013 IRDAI guidelines on standardisation of terms in health insurance, all health insurers in India have to follow a common definition of “pre-existing condition” as follows:
Any condition, ailment or injury or related condition(s) for which you had signs or symptoms, and / or were diagnosed, and / or received medical advice / treatment within 48 months to prior to the first policy issued by the insurer.
So, if you are applying for a policy on January 1, 2016, if at any time between Jan 1, 2011 to December 31, 2015, you’ve had signs/were diagnosed/had received medical advice/undergone treatment for any medical condition, it will qualify as a pre-existing condition.
How pre-existing condition can affect your health insurance policy
Regardless of which of the health insurance plans in India you choose from, a pre-existing condition can affect it in one or more of the following ways:
In any application form for health insurance, you’ll find a question on this point. One of the basic principles of insurance is “utmost good faith” & here, the onus is on you to disclose honestly details of any such condition. In an event that you misrepresent/do not disclose, the insurer has every right to reject your claim when you make one.
Every health insurer has a set of internal underwriting guidelines that they follow when deciding whether and on which terms they can issue the policy to you. In case of a pre-existing medical condition, there can be the following implications:
As mentioned above, even if a standard policy is issued, if you closely read the terms and conditions of the policy, it will invariably have a “waiting period” which ranges from 12 months to 48 months. This implies that for a policy issued on Jan 1, 2016, if you are hospitalised due to “diabetes” anytime till December 31, 2019 (assuming a waiting period of 48 months), your insurer is not liable to pay the claim.
Insurers give an option to policyholders to increase the sum assured of the policy upon renewal. So, continuing from the above example, suppose on the renewal date Jan 1, 2017, if you decide to raise the sum assured from Rs. 2 lac to Rs. 3 lac, the waiting period for diabetes for the incremental Rs. 1 lac will end on December 31, 2020 (and not December 31, 2019 for the existing sum assured of Rs. 2 lac)
Points to note w.r.t. pre-existing condition
Following are some pointers to note w.r.t. pre-existing condition:
While buying a health insurance policy:
Once you buy a health insurance policy:
A pre-existing medical condition should not be a deterrent for buying health insurance and securing your family’s financial future. However, proper disclosure and some precautions ensure that in case you need to make a claim, you have a smooth and hassle free experience.
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