What should you do if your application for health insurance policy is denied?

Dhruv Sarin

Vasan is a 35-year-old software engineer who has recently applied for a health insurance policy. He was shocked and confused when he got to know that his application has been rejected by the insurer. The reason was, Vasan has got his kidney stones removed some time back which made him “risky to be covered” by the insurance company. This definitely was hard for him to digest because kidney stone, he thinks, is not even a critical disease.

Call it his ignorance or lack of awareness, there are multiple cases in which people are denied insurance where the chances of them falling sick in the near future are high as most of the insurers would rather reject a healthy person than insure an unhealthy one because a customer making a claim too soon impacts the sustenance of the plan. To the customer, it is a double whammy as the rejection not only makes a person anxious but can also lessen her chances of getting a new policy again. The most common grounds for rejection are age, pre-existing diseases, individuals working in hazardous situations, exclusions by insurance companies and filling up the wrong details in the issuance form.

Vasan isn’t old enough that he will be denied insurance because of age. It could be due to his medical condition or some type of exclusions in the policy. Either way, a rejection for the first time can scare the consumer for a lifetime. He may or may not take a decision again to buy a health insurance policy. But there is yet another understated problem that impacts issuance of insurance heavily – problem of ambiguous question on application form resulting in incorrect details leading to rejection. For example, a question like “within the last two years, he has consulted a doctor or not?” can confuse a person filling up the application form. A doctor visit could be as common as for a normal fever but in an attempt to avoid mistakes, the person might say yes and his trouble of policy getting rejected will start from the very moment. Many insurers have not removed this ambiguity in the questionnaire, but one will need to be aware of what to do should one face such situations.

Getting back to the case referred above, not all insurers take a strict view and decline insurance like the one Vasan applied to. Some insurer might declare your illness as pre-existing or risky but will give you a policy depending on the severity of the ailment. For example, if you are a diabetic patient but it’s under control due to medication then you might be charged less. This means you should not just stop your attempt of buying a health insurance policy after your first rejection as there are different insurers with different plans in the market. This is where good market research or a good insurance advisory comes into play.

It is better if you look for a policy where disclosures are detailed and clear; this will not bluff you into applying for a wrong policy. Add all relevant details that have had any memorable impact on your health. If you are unsure, pick up the phone and call up the insurer or other key insurance advisories that you trust. Further, if you suffer from serious conditions where chance of rejection of application is high, go for plans with high deductibles. When you are willing to pay a certain initial amount of the incurred expenses, the insurer finds it easier to issue policy to you.

Vasan should try again and look for a policy by another insurer. Otherwise, contact the same insurer if there could be any moderations done with the policy. Before applying for health insurance policies go researching in depth on both the insurer and its plan(s). Once you have the full knowledge of the plan, you would know what to apply for. Even if you face rejection once don’t panic and sit back. Apply to another insurer; what may not be possible for one may be possible by another. Do some online research and seek advice from insurance advisories. This would help you find insurers and plans that can cover your specific condition. Work your way out through the valid options and choose the best after filtering the rest.

(The writer Head of Health Insurance, Policybazaar.com)