Many people buy health insurance under the impression that it will provide coverage for every medical need immediately; however, this is not always the case. One of the most critical concerns is pre-existing diseases, which you already had before you purchased an insurance policy.
Will your insurance cover the cost if you need treatment for a pre-existing condition? Or will you have to wait for your insurance to cover it?
Knowing this can save you from a sudden surprise when it's time to submit your claim. Learn how insurers deal with pre-existing diseases and what you should check before buying a plan.
What Counts as a Pre-Existing Disease in Health Insurance?
A pre-existing disease in health insurance refers to any disease, injury, or condition for which the insured person has received treatment or been diagnosed before the health policy is executed. According to the Insurance Regulatory and Development Authority of India (IRDAI), any disease diagnosed or treatment received within 48 months preceding the policy's purchase date shall be considered a pre-existing disease.
Typical Examples are diabetes, high blood pressure, asthma, thyroid conditions, and, yes, admittedly, cancer or heart disease. Insurers will nearly always require full disclosure for these conditions at the time of your application for the policy. Generally, pre-existing diseases will be covered after a two- to four-year waiting period before any claims are paid. This will help insurance companies evaluate risks to sift through premiums and waiting periods, and it will also help determine which types of health insurance plans are the best fit for an individual.
Do Insurers Cover Pre-Existing Conditions from Day One?
Most health insurance plans will not cover all conditions from day one. This section will list down which health insurance conditions are covered from day one, so you know what's coming when you sign on the dotted line:
• Unintentional Injuries and Emergencies: Most health insurance plans provide immediate coverage for accidental injury and medical emergencies. They will also offer coverage for injuries such as broken bones, burns, or trauma because insurers view these as immediate and unexpected situations.
• Hospitalisation for Illness: Hospitalisation for a sudden illness or injury unrelated to a pre-existing disease will provide coverage from day one. The exception is that coverage for pre-existing diseases may still have a waiting period.
• Care Procedures and Minor Treatment: Some policies cover specific care procedures or minor treatments with no waiting period or only waiting if related to a pre-existing condition.
• Maternity and Newborn Care: Most standard plans include specified maternity and newborn care waiting periods. However, on day one, some enhanced or comprehensive plans cover certain complications associated with delivery, with varying degrees of coverage.
• Pre-Existing Conditions in Some Plans: Several health insurance plans and group policies cover pre-existing conditions on the first day of coverage. These plans may cover chronic illnesses (for example, diabetes, hypertension, asthma, and high cholesterol) as a base benefit or through additional riders that waive the waiting periods.
• Preventive Health Checkups: Some insurance policies cover preventive health services, such as vaccines and screenings, before a waiting period. Without a waiting period, insurance companies encourage members to detect illness or maintain health, which is beneficial for everyone.
What is the Waiting Period and Why Does It Matter?
A waiting period in health insurance is the specific time (as specified in your insurance contract) after purchasing the policy during which you cannot claim benefits related to particular conditions or treatments.
The waiting period, when used, protects insurers from claims and liability from many claims related to the same condition or for reasons that would never have been paid. A waiting period will depend on the condition and insurance, policy type, and can last for a few days or years. Here is why the waiting period is significant:
• Delaying Immediate Claims: Waiting periods protect the insurance company from potentially large, immediate claims from new policyholders who may be obtaining insurance after developing an illness or receiving a medical diagnosis. Waiting periods add a layer of protection against sudden losses to the insurance fund and make it an inconvenience to want to buy insurance at the time of loss.
• Handling Risk: The waiting periods allow the insurers to process and manage risks, making sure they provide coverage for the future claims of the policyholder instead of existing or imminent needs. This is important because an insurance pool must always ensure solvency.
• Returning the costs of early high-cost claims: Waiting periods support low-cost premiums, allowing insurers to be cost-competitive for all policyholders by reducing the impact of early high-cost claims.
• Encourage early enrollment based on intent: Waiting periods support enrollment when people do not have a health-based claim, which increases (or at least expands) the risk pooling and builds healthier insurance pools. Early enrollment avoids barriers created by waiting to enrol, or coverage delays create access barriers for individuals with significant critical needs.
• Design products: Waiting periods enable the creation of customised and accurate insurance products that cater to customer needs and expectations, allowing for differentiation based on waiting periods for specific diseases, procedures, and conditions.
• Preventing fraudulent claims: Waiting periods are a pragmatic solution to stop fraudulent claims. Currently, someone needs to make a claim but cannot purchase insurance. This benefits both insurers and honest policyholders.
• Securing Financial Solvency: Risk pooling, in its simplest sense, will protect insurers from financial hardship. In sharing risk collectively with policyholders, no single 'event' will lead to large payouts that would otherwise undermine the funds of the insurance pool.
• Policy Specific Exclusions: Waiting periods are specific to policy type and condition (such as pre-existing, maternity benefits, critical illness, etc.); nonetheless, they are ancillary and essential to locating the balance between coverage and insurer liability.
How to Disclose Pre-Existing Conditions When Buying a Policy?
When you are getting a health insurance policy, it is vital to disclose any pre-existing medical conditions. This produces transparency, enables the insurer to assess risk fairly, and protects you from claims denial or cancellation issues later. To help you understand how to disclose pre-existing conditions adequately, here are easy steps:
• Be Honest and Full: When you are evaluating any health issue, condition, or conditions you currently have or have had, or when you are judging. When discussing your health, you have several options for addressing it. You can consult your doctor if you have a chronic disease, such as diabetes, heart disease, asthma, allergies, or any other condition that is significant to your overall health.
• Provide Relevant Medical Records: Whenever possible, provide medical records to support your arguments, authorise a shared treatment process to help your report, and provide relevant test/results to validate your report.
• Please fill out the Application Form Accurately: It is assured that the responses you provide to the health questions on the application form are correct and accurate; do not leave out any condition, and do not mislead.
• Be Prepared to Take Medical Tests: Some insurers may require the insured to undergo a pre-policy medical examination to assess their medical condition.
• Know the Waiting Period: Most health plans will have a waiting period (usually 1 to 4 years) before coverage for pre-existing conditions begins. Understanding this knowledge helps you know what to expect in the future when you first claim these conditions.
• Update Changes at Renewal: If you have any health changes during the eight years of the original policy, you must notify your insurer when updating your records at renewal time to avoid disputes later.
Pre-existing disease coverage can make the difference in the applicability of your health insurance. Knowing about waiting periods, exclusions, and definitions can help you avoid unpleasant surprises when filing a claim. Finding the right plan can ensure your long-term financial viability if you (or your family) have medical conditions. Be sure to read the fine print and compare plans before you buy. The right coverage today will protect you from unexpected consequences and expenses tomorrow.
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