Health insurance is a significant investment. You need insurance so that you can seek the necessary treatment without bearing the enormous costs associated with hospitalisation, surgery, treatment, and so on. However, every insurance policy comes it its own set of terms and conditions. The coverage you get depends upon the sum assured and the deductibles you choose.
Health Insurance for Pre-existing Conditions:
Health insurance companies also provide policies for individuals suffering from pre-existing diseases. However, such individuals cannot seek treatment for those diseases and cannot encash the policy until they've ridden out long waiting periods lasting 2-4 years. However, all of this is set to change as the Insurance Regulatory and Development Authority of India (IRDAI) has recently amended the definition of pre-existing diseases. Here's the original definition of pre-existing diseases, the new definition amended by the IRDAI and what this change could mean for policyholders.
Pre-Existing Diseases – Meaning and Original Definition
A pre-existing disease is an insurance term used to refer to a condition, injury or ailment, which already exists when a policyholder purchases a health insurance policy. Often abbreviated as PEDs, the insurance provider generally excludes these conditions from the policy coverage until the policyholder rides out what is known as an 'initial waiting period'. Typically, the minimum and maximum waiting periods on such pre-existing diseases is anywhere between two and four years, respectively.
Pre-Existing Diseases – The Two Amendments made by the IRDAI
In September 2019, the IRDAI modified the definition of pre-existing diseases. The IRDAI issued a regulation stating that insurance companies were mandated to include certain illnesses and diseases if they were diagnosed (in the policyholder) within three months of buying the insurance policy. The amended definition was included in the standardisation guidelines in health insurance that the IRDAI released on 27th September 2019.
However, the IRDAI issued another circulator on 10th February 2020, in which it once again amended the definition of pre-existing diseases. As per the new circular, the IRDAI has now deleted the 'additional/modified clause'. Thus, as per the new definition, no such disease or illness will be treated as pre-existing even if it is diagnosed within a period of three months, or later, after one has purchased the health insurance policy.
The New Definition of Pre-Existing Diseases as mentioned in the IRDAI circular
The new description of pre-existing diseases comprises of three clauses. It is as under:
- As per IRDAI, a Pre-existing Disease is any condition, injury, ailment, or disease, which is/are diagnosed by a doctor within 48 months (2 years) before the effective date of the insurance policy issued by the health insurance provider
- It is a condition for which medical treatment or advice was recommended or provided by the doctor within 48 months (2 years) before the effective date of the insurance policy issued by the health insurance provider.
- The IRDAI also states that (Life insurance providers may define the norms for the applicability of pre-existing diseases when a policy is reinstated.
- A Pre-existing Disease is any condition, injury, ailment, or disease for which any signs or symptoms, leading to an illness or medical condition are presented and have resulted within less than three months of the time the policy is issued.
Note that the amended definition of pre-existing diseases does not apply to overseas travel insurance.
How the Amended definition can help policyholders
Owing to the original definition of pre-existing diseases, health insurance companies had the leverage to reject insurance claims and increase the waiting period, even if one was diagnosed of a condition within a few days of purchasing the health insurance policy. As a result, the policyholders could not file a claim despite pay high insurance premiums. However, due to the IRDAI's interference, policyholders do not have to worry about filing claims. The move by the IRDAI could undoubtedly lead to reduced instances of claim rejection rates in the health insurance sector.
The IRDAI has mandated all insurance providers, including third-party administrators (insurance agents and brokers), wherever applicable, to make the necessary changes and ensure complete compliance with the new directive stated in IRDAI's circular, with immediate effect.
List of Diseases regarded as Pre-Existing:
Health insurance providers typically enlist certain, specific diseases as pre-existing in the policy document. Here's a list featuring some of the most common types of diseases or conditions that are generally regarded as pre-existing in all insurance policies
- Asthma
- Diabetes
- High blood pressure
- Thyroid
- Sleep apnoea
- Lupus
- COPD
- Cancer
- Atherosclerosis
- While purchasing a health insurance policy, you must truthfully disclose your medical history to your insurance provider
- You must inform them if you are suffering from any pre-existing diseases
- Failure to notify the insurer about pre-existing conditions can result in your claim being rejected
- The insurer may also refuse to renew your policy
- The insurer may levy a higher insurance premium if you’re suffering from pre-existing conditions
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