Pre-existing illness: Why you should never hide it while buying health insurance policy

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Pre-existing illness has been a bone of contention for millions of policyholders over the years. This is because often at the time of buying a policy, most of us overlook these questions without understanding their implications. But the subject is not so complicated if you understand it well and let your insurer know in advance of pre-existing conditions. Here is a lowdown on why you should always declare pre-existing illnesses to your health insurance company. 

What is pre-existing illness?

In simple words, pre-existing illness is any ailment that the policyholder was diagnosed with within 48 months before buying the policy.

According to the Insurance Regulatory and Development Authority of India (IRDAI), “Pre-existing Disease means any condition, ailment, injury or disease that is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement or for which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement.”

Waiting period 

The insurance companies have a waiting period of two-four years for illnesses that already exist while buying the policy. Once this period expires, you become eligible for claims relating to pre-existing diseases.

How to declare pre-existing disease?

Declare the information at the time of filling the proposal form. The insurance company also follows up with a verification call to inquire about any pre-existing illness. The onus lies on the policyholder to provide all information without hiding any facts.

The proposal form also includes questions relating to smoking and drinking. It would be best if you were careful and honest while answering them. 

Pre-existing illness not declared

The insurance company can deny your claim if you hide a pre-existing illness at the time of buying a policy. However, under new guidelines issued by IRDAI, a moratorium clause has been introduced across all policies. Under the moratorium clause insurers cannot contest a claim 8 years into a policy, excluding fraudulent claims.

Declaration of pre-existing illness

After the declaration of pre-existing illnesses, the insurance company can take the following steps:

Increased premium: Generally, for pre-existing illnesses such as diabetes and hypertension, insurers charge an extra premium. This is because the chance of hospitalisation gets higher with pre-existing diseases.

Permanent exclusion: Irdai has recently allowed insurers to include a permanent exclusion for certain diseases that insurers were completing denying the coverage earlier. The list consists of cancer, HIV, alzheimer’s, stroke, kidney disease, liver disease, pancreas ailments, epilepsy, heart ailment, bowel disease and hepatitis B.

Denying the policy: The insurance company can also reject the proposal if the underlying team finds it difficult to assess the risk.