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Published in Mint on 15 September, 2015, Written by Abhishek Bondia
What are the grounds for increasing my premium rates for health insurance policies?
—Abhay Sinha

For initial issuance, insurers consider your pre-existing medical condition to increase rates beyond their standard table. This medical condition could be an old surgery, a chronic ailment, or even an adverse body mass index. The increase once fixed, will be applied to all renewal premiums.
For renewal premiums, insurers cannot increase the rate for an individual policyholder beyond the standard table, unless agreed at inception. Irrespective of their claim history or medical condition, the insured cannot be asked to pay extra at the time of renewal. Premium would increase only as per the age table provided at inception. Further increase has to be pre-approved by the insurance regulator.
My mother is a diabetic. Can I buy health insurance for her?
—Gayathri Ninan

You can buy health insurance for someone with pre-existing diabetes. Depending on the type and extent, you will have options. Only a few insurers would issue policy to a type 1 diabetic or a severe case of type 2 diabetes. For a controlled case of type 2 diabetes, you should have three to four options. Insurers may exclude diabetes related conditions for between two and four years. Since diabetes is higher risk for the insurer, I suggest that you initially apply for a lower sum assured, in the range of Rs.2-5 lakh. Insurers are likely to be lenient when underwriting a lower sum assured. Over a period of time, you can enhance your cover.
We are a family of four (our daughters are 12 and 17 years old). Should we take a family floater or individual policies?
—Bhargav K.

Considering the age of your children, you could consider taking a family floater insurance for yourself, wife and younger daughter. For the elder daughter, you could take an individual insurance. The maximum age of dependants varies by insurer. If you purchase a separate insurance for your elder daughter, you wouldn’t have to worry about migrating her to a new plan soon.
Are there no exclusions after the first year in a personal accident cover the way there aren’t any in life insurance?
—Junaid Khan

A personal accident policy is not structured like a life insurance policy. A personal accident policy generally has only permanent exclusions and no time-bound exclusions. So, while suicide is a one-year exclusion under life insurance, it is a permanent exclusion under accident insurance. Additionally, there are 10-12 named exclusions under a personal accident policy.
Given the circumstance of the claim, the insurer will ask for clarifications. The objective will be to establish that none of the exclusions are applicable. If these clarifications are duly supported with documentation, claim settlement is relatively straight forward.