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The insurance regulator IRDAI has made changes to the rules related to pre-existing diseases (PED). This will benefit a large number of health insurance policyholders. Until now, any disease up to four years before applying for the policy was considered as a pre-existing disease. Now, IRDAI has reduced this period to three years. Implying that any disease up to three years before buying the policy will now fall under the PED category. The new rules have come into effect from April 1, 2024.

Additionally, under the new rules, IRDAI has reduced the moratorium period from eight years to five years. The moratorium period means that if you have kept the health insurance policy active for five years, then the insurance company cannot deny any disease claim. In such a case, all types of waiting periods will be considered over. If a person has ported the policy, then the policy period of the old company will also be included in the moratorium period.

The treatment of pre-existing diseases can be expensive, so insurance companies cover such diseases after a certain period, which is called the waiting period. This period can be between two to four years, depending on the disease. After the waiting period is over, the insurance company provides the facility for treatment of the particular disease. Under the rules, if the policyholder gets to know about any disease after three months of buying the policy, it will not be considered as pre-existing disease. But if the policyholder gets a heart attack or is diagnosed with diabetes within three months of taking the policy, then it will be considered a pre-existing disease.

How important is the issue of old diseases in health insurance? What will happen if a person hides an old disease? What can an insurance company do after finding out about it? Let’s understand this.

Suppose a person has applied for a health insurance policy. Under IRDAI’s new rules, if he has any pre-existing disease or has been undergoing treatment up to three years before buying the policy, he will have to disclose it in the proposal form.

If the insurance company finds out during the proposal form filling that the applicant or any member included in the policy has a disease, it can increase the premium amount, add a co-payment clause, or reject the application altogether. Under co-payment, the policyholder has to pay a pre-determined portion of the treatment cost from their own pocket. After that, the insurance company bears the remaining amount.

If the applicant hides the disease and takes an insurance cover, and gets treatment in the meantime, and the insurance company comes to know that the disease is pre-existing, it can reject the claim. In fact, it can also terminate the policy.

Now let’s understand the types of waiting periods associated with an insurance policy….First comes the initial waiting period…If a person has bought the policy, then it doesn’t mean he can get treatment from day one. Health insurance policies have an initial waiting period. Usually, this is 30 days. During this time, if the insured person gets admitted to the hospital, he will not get a claim. However, a claim can be given in case of an accident.

For pre-existing diseases, insurance companies have different waiting periods. Usually, this period ranges from 2 to 4 years. During this time, if you get admitted to the hospital for a pre-existing disease, you cannot make an insurance claim. It is also possible that this waiting period only applies to a specific disease.

Insurance policies also have waiting periods for specific diseases like cancer surgery, hernia, cataract, and major diseases like joint replacement. These waiting periods can range from two to four years. The policy document clearly mentions the details about this.

It is also important to know about the maternity waiting period. For maternity benefits covered under health insurance, there can be a waiting period of one to five years. However, most insurance companies do not provide maternity cover. For that, a separate rider needs to be taken. In group insurance, maternity cover is provided from the start.

Jitendra Solanki, a SEBI registered investment advisor, says that the change in the definition of pre-existing diseases and moratorium period in health insurance is in the interest of the insurance buyer. Now insurance companies cannot deny a policyholder for a disease that was not detected three years before buying the policy. To prevent health claims from being rejected citing pre-existing diseases at the time of claim, the regulator has reduced the time limit for pre-existing diseases from 4 years to 3 years. With this change in rules, more people will be able to buy health insurance. IRDAI’s step will increase the reach of health insurance in the country.

Overall, IRDAI’s new rules will benefit policyholders. To fully utilise the benefits of health insurance, provide accurate information in the proposal form while buying the policy.Understand the waiting periods associated with the policy properly, so you know when a pre-existing disease will be covered.