With rising medical inflation, people have realised the need for a good health insurance plan. However, there are several factors that one must consider before buying insurance. While the quest to choose the best mediclaim policy may be confusing, there is also a fear of rejection of your policy request.
To avoid rejecting high premiums for the policy, many individuals choose not to disclose one of the vital information from the insurance provider – the pre-existing conditions.
Although this is one of the common mistakes that people typically commit, they do not realise that the decision to hide these crucial details can have a severe impact at the time of claim.
Read on to know why it is imperative to disclose pre-existing diseases while purchasing health insurance coverage.
What are Pre-existing Ailments?
A pre-existing ailment or illness is any medical condition the insured already has before buying a health insurance policy. According to the Insurance Regulatory and Development Authority of India (IRDAI), if the insured suffers from any medical condition(s) up to four years before the policy purchase, it is termed pre-existing illness.
How Does a Pre-existing Disease Affect Health Insurance?
Buying a health insurance policy for a pre-existing disease may be difficult as insurance companies are reluctant to cover individuals with existing medical conditions. The main reason is that individuals with existing medical ailments have higher chances of recurrent claims, thereby increasing the cost.
But, some insurance providers offer separate pre-existing disease cover in health insurance. Here are a few terms and conditions insurance providers apply if you have a pre-existing condition:
● Waiting period
Health insurance plans are designed to cover pre-existing illnesses, but only after serving a certain waiting period. The waiting period for a pre-existing disease is typically from 2 to 4 years, depending on your chosen policy, age and other similar factors. The waiting period starts when the policy is issued. During this waiting period, the policy will not cover the medical expenses if one gets hospitalised due to an existing medical condition.
However, many insurers offer a ‘waiver’ to forgo this waiting period at a cost. Purchasing this waiver indicates that the insurer will cover the medical costs arising from already existing diseases from day one.
● Premium loading
Premium loading is the additional premium charged to a high-risk applicant. This additional amount covers a risky individual based on their lifestyle habits and health history. Thus, health insurance policies for pre-existing diseases usually have higher premiums than the base premium amount. However, insurance companies cannot apply premium loading if any disease occurs after the policy issuance without renewal breaks.
● Medical check-up
The insurance company may ask for a medical check-up for individuals with pre-existing diseases before deciding to issue a policy and at what premium.
● Exclusion of pre-existing illness
The insurance company may offer you coverage if you agree to get an exclusion for the pre-existing condition permanently.
What Happens if You Don’t Declare a Pre-existing Condition?
Many individuals prefer not to declare the same because of the above consequences or terms and conditions related to pre-existing diseases. People think reporting pre-existing conditions for obtaining health insurance coverage has major drawbacks, forcing them to commit a big mistake.
However, the mistake is hiding this vital information from the insurance company. Because there is a high chance that the insurance company will find out about the pre-existing disease at the time of claim, the medical history and treatment reports will prove if the condition already existed at the time of policy purchase. If yes, you might have to face serious consequences. They may include:
- The insurance company has full right to turn down your claim upon knowing that the pre-existing disease information was deliberately hidden at the time of purchase of the policy.
- Moreover, since the information disclosed in the proposal form at the time of purchase of the policy is incorrect, it will be considered a breach of trust. The insurance company will deem the policy worthless, that is, deemed void.
- This addition would mean that the premium amount you paid was for nothing since you did not enjoy the required coverage.
Thus, if you have any health conditions, you must disclose everything truthfully, as insurance underwriting depends on disclosing your current and previous health conditions.
Not informing about your health conditions may immediately benefit you through lower premiums, but rejection of your claim may hit hard during a medical crisis. Although you may not be covered for pre-existing diseases in the initial few years due to the waiting period, you will ultimately enjoy medical coverage and protection once this waiting period ends.