Why paying more for day 1 health insurance cover may actually save you more if someone has a pre-existing disease

If your health insurance has a waiting period of two or three years for pre-existing diseases, it means that you cannot make a claim for those conditions during that time

As we know, if you have any health condition, insurance companies do not normally provide you coverage for ailments related to that health condition from day one. They have a waiting period clause, which stipulates that the coverage will be available after a certain period. In 2024, the Insurance Regulatory and Development Authority of India (IRDAI) reduced the waiting periods for pre-existing diseases to three years from four years.

However, by paying an extra premium, you can get health insurance coverage.

“Health insurance plans with zero waiting period - made possible through day one riders, typically cover common lifestyle-related conditions such as diabetes, hypertension, thyroid disorders, asthma, and even early-stage cardiac issues from day one,” says Siddharth Singhal, Head of Health Insurance, Policybazaar. ‘Day one’ starts after an initial 30-day general waiting period. These riders are distinct from PED reduction riders, which shorten the standard two to three-year waiting period to around 12 months.

From Diabetes to Thyroid: How Medical Conditions Impact Your Premium

“People with chronic conditions or pre-existing conditions are the ones who are generally at a higher risk and more likely to need regular medical attention. It directly indicates that the risk of getting frequent claims from them is more likely than for people with no known health issues,” says Bhaskar Nerurkar, Head- Health Administration Team, Bajaj Allianz General Insurance.

Insurers understand the proposer/ insured’s health history in detail and look at specific information like how long the individual has had the medical condition, how well it is being managed, and whether it has led to any further complications.

“For example, in the case of diabetes, that might mean asking for the proposer’s recent HbA1c reports. For hypertension, insurers might want to see blood pressure readings and whether the individual is on medication. A person with well-controlled thyroid levels is viewed as lower risk compared to someone with erratic symptoms or recent hospitalization,” says Ajay Shah, Head – Distribution, Care Health Insurance.

Based on the respective disease assessment, the insurance company approves the policy. If someone with a pre-existing condition wants to skip the usual waiting period so as to be able to claim immediately, the insurance company will charge an extra premium to cover the added risk if it's acceptable to them. “If the risk is too high, the companies can also deny such requests and impose the pre-existing waiting period,” says Arti Mulik, Chief Technical Officer, Universal Sompo General Insurance.

Let’s say you’re a 35-year-old individual with diabetes and mild hypertension, looking for Rs 10 lakh health cover in a Zone 1 city. If you go for a regular health insurance policy with the usual waiting period for pre-existing conditions, your premium might fall around Rs 10,000 a year. But if you want those same conditions covered from day one, and you opt for instant cover for pre-existing medical conditions, you’re likely to pay around Rs 12,000. That’s approximately a 19% jump in premium, depending on how insurers underwrite your case.

Why Paying More for Day 1 Cover May Actually Save You More

As explained earlier, if you already have a long-term illness, your chances of needing medical care are higher. If your health insurance has a waiting period of two or three years for pre-existing diseases, it means that you cannot make a claim for those conditions during that time. And during this period, if you’re hospitalized, you’ll have to bear the full cost out-of-pocket.

For older people with known health issues, choosing a health insurance plan that covers these conditions from day one can be very helpful. The premiums in such cases are on the higher side, but it gives you peace of mind.” You won’t have to worry about sudden hospital bills or paying from your own pocket if you need treatment soon after buying the policy.

“Opting out of day 1 coverage exposes policyholders to the risk of uncovered medical expenses, which could easily run into Rs 50,000 to Rs 2 lakh or more for a single hospitalization related to diabetes, hypertension, etc. For long-term chronic illnesses, flare-ups or complications can arise unpredictably,” says Singhal.

Since you’re already paying for insurance but not getting the benefit when you need it most, you may feel that buying insurance is not helping. “So, if you feel that your medical treatments should be covered sooner without any waiting periods, it’s better to choose a plan that covers pre-existing conditions from day one, even if it costs more than regular premiums,” says Mulik.