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Nirali Gupta’s (name changed) child suffers from cystic fibrosis, a congenital disease. When she approached an insurance company to get her child insured, her proposal got rejected.
Even as insurance regulator Insurance Regulatory and Development Authority (IRDA) has issued guidelines on mandating coverage for congenital diseases, not many insurers are doing it.
IRDA guidelines
IRDA in September 2019 issued ‘Guidelines on Standardization of Exclusions in Health Insurance Contracts’ which stated that no insurance company will incorporate internal congenital diseases, genetic diseases or disorders as exclusions in the terms and conditions of the policy contract.
It means such diseases will be covered if the disease manifests due to these causes after taking a policy. If you have a pre-existing congenital disease, it will be subject to rigourous underwriting at the time of taking a policy. Sanjay Datta of ICICI Lombard General Insurance says, “Birth defects are evaluated on an individual case basis and coverage provided on a selective basis.”
Naval Goel – CEO – PolicyX.com explains it in the case of a family floater policy. “The children with birth defects are not covered in the family floater plans as they assess a higher risk of life. If a baby is covered under an insurance scheme and a defect is detected after that, the insurance companies take a detailed explanation statement from the parent that the defect detected in the child is not a birth defect,” says Naval Goel – CEO – PolicyX.com.
Coverage on a case-to-case basis
Goel suggests the coverage for birth defects is possible on paying extra premium. “Children with disabilities by birth can be covered in separate policies by paying extra loading charges, co-payment and certain conditions that prior disease related expenses won’t be covered,” he says.
Insurers say the coverage for such diseases is given on a case-to-case basis. It depends on individual underwriting philosophy, says Dr S Prakash, managing director, Star Health and Allied Insurance.
“This is about the risk that the concerned individual insurance company is willing to accept for a child born with congenial defects. This can be only be enhanced with increased insurance penetration. As when more and more individuals come forward and avail insurance and when the pool becomes large then appetite to cover all people with risk will be more,” he says.
Goel explains that there are two kinds of birth defects- mental and physical. “In the case of mental disability, the child doesn’t get covered under any general health insurance plan. But if the child gets detected with any physical defects, then the case goes to the underwriter. They assess the risk aspect of the diseases before they issue the policy.”
Get your child covered from Day One
Star Health family floater comprehensive policy provides health insurance to newborn from day one. Even if the child is born with congenital diseases, it’ll be covered from day one. A marginal increase in premium will happen from the following policy year, but no extra load due to child birth in the same policy year. Dr Prakash shares an example: If a child takes birth in the third month of the policy year, he or she will be covered for the next nine months. Additional premium will be levied in the next policy year.
He further suggests insurance for newborn should be made mandatory. “Every child immediately after birth comes under the immunisation programme. In the same way, they should also come under health insurance cover. This will ensure health insurance coverage for all. If third party car insurance could be made mandatory, then it is possible for health insurance too,” he points out.