Organ donation and insurance cover: At your own risk

Saji GeorgePolicylitmusOrgan donation involves two individuals, one who is ill and needs a healthy organ to carry on a semblance of normal life (the recipient) and the other who is healthy and motivated by affection or money to donate a healthy organ (the donor). Organ transplantation itself is a major surgical procedure and both the donor and the recipient require hospitalisation.Health insurance policies cover hospitalisation, but the lines start to blur when organ transplant is involved. Let us first look at this from the recipient’s perspective. If the recipient has a health insurance policy, his policy will usually cover all hospitalisation expenses incurred by him and any such expenses incurred by him as part of the transplantation procedure will be covered. It is important to note that the cost of the donated organ is normally never covered. If the recipient’s policy does not have a clause that covers hospitalisation expenses for the donor, the donor’s hospitalisation expense will have to be picked up by the recipient. There are several policies in India that cover the donor’s expenses as well.But what if the donor has health insurance? Will his expenses be covered by his policy? Surprisingly the answer to that is “no”. And the reason is that insurers pay for expenses that one incurs on which one has no control. Organ donation is a voluntary act and insurers find it difficult to price for such events.Let us now look at the scenario post transplantation.The recipient who has received the organ is generally less healthy than normal and is usually on immunosuppressive drugs. These drugs make him prone to infection and his lifestyle undergoes a drastic change. Insurance companies will reject any fresh application made by him for health insurance. If he already has health insurance, renewals are normally not rejected on the grounds of claims made, hence if a recipient is already covered, he need not worry, although he may end up paying a higher premium.The matter is slightly different for a donor. If a donor applies for a fresh insurance policy, after he has donated an organ, it is quite likely that his application will be rejected, because he is missing an organ. The fact that he could not have donated without him being healthy, or that some donated organs like the liver actually grow back do not seem to cut ice with the insurance company, who believe that it is better to be safe than sorry. As explained above, he may not be able to claim expenses that he has voluntarily incurred on transplantation as a donor. If he already has a Health policy, companies do not normally discriminate against such persons and so long as he is able to prove that the donation was after he purchased his policy, any claim (not related to the transplantation) will get honoured. But it is worthwhile to read the fine print.The scenario is similar though not identical in life insurance. If a person applies for life insurance after he has donated an organ, it is almost certain that his application will be rejected. However consider the case of a person who has already purchased insurance and has then donated an organ. His policy will not be impacted and will continue at no extra cost so long as he does not stop paying premiums. If he stops, his policy will lapse and if he attempts to re-start, his policy will be underwritten afresh, and be liable to rejection of revival/re-start. There is no obligation for an existing life insurance policy holder to inform the insurer, except if he donates the organ between the period of him applying for the policy and within 90 days of him having received the policy. Every year thousands of organs are transplanted and expenses incurred are terribly large. Health insurance has not kept up for various reasons. A donor who donates out of affection not only gives up a vital part of his body but also the rights to a proper health cover, if he has not previously insured himself. India needs donors, and many donors do lead a normal and healthy life after such a noble act. Organ donation in itself should not be an automatic ground for rejection. IRDA should probably consider that a larger societal good should win over narrow and obsolete interpretations by insurers.Until that happens, we recommend that in addition to health insurance, one must purchase a critical illness cover. Look for CI covers that include major organ transplant as a critical illness. While this policy still will not cover the donor expenses, such policies pay out the whole sum insured and this large amount can go a long way in covering the donor’s expense and the cost of the organ. Critical illness policies are fairly inexpensive, if bought early in life. The only disadvantage is that these policies usually expire after a person has reached the age of 65 and cannot be renewed thereafter. Both life and general insurers offer CI covers. The general insurance companies will offer stand-alone CI covers, while CI from a life insurer is bought as a rider to the main life policy and the total cost therefore is usually higher.We also recommend that every person be insured for an optimum amount when he is healthy and does not need insurance. If you need insurance, it is probably already too late to buy one. As always, read the fine print before you sign up to avoid disappointments.