Family Health Insurance

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When it comes to the burden of illnesses, India has a large number of people suffering from one or more illnesses. Many studies point out the disease burden of India, the second-largest populated country in the world. Have a look –

  • According to a paper called ‘NCDs in the Development Agenda’, over 20% of India’s population suffers from one or more non-communicable diseases (NCDs). The paper, prepared by an international NGO called PFCD (Partnership to Fight Chronic Diseases) with inputs from NHSRC (National Health Systems Resource Centre) shows that the NCD disease burden in India is 53%.
  • Another survey conducted by TARI (Thought Arbitrage Research Institute) found that more than 67% of individuals suffering from NCDs were in the age 26 to 59 age bracket
  • The Longitudinal Aging Study in India (LASI) found that about 75 million senior citizens suffered from chronic diseases when it came to senior citizens.

Suffering from a medical illness, thus, is not uncommon in today’s time and age. However, if you buy a health plan, declaration of such illnesses becomes important.

Additional Read: Disease-specific waiting periods in Health Insurance

Pre-existing illnesses and health insurance

The pre-existing disease clause is an important aspect of every health insurance policy. Pre-existing conditions are medical complications or illnesses that you suffer from when you are buying a new or a fresh health insurance policy. For instance, if you have diabetes and you are buying a new health insurance plan, diabetes would be considered a pre-existing illness in the context of the plan.

Health insurance plans levy a waiting period for pre-existing illnesses. If there is any medical complication during the waiting period due to the pre-existing illness, you cannot claim for the associated medical bills as well. You would, thus, have to bear such medical bills. However, once the waiting period is over, coverage would be allowed for possible medical complications arising out of the pre-existing illness.

For instance, say you buy the plan with diabetes and the waiting period is 4 years. After 2 years, you suffer glaucoma brought on by diabetes. In such a case, the cost of treating glaucoma would not be covered since you suffered the illness within the waiting period of 4 years. However, if glaucoma would have incurred in the 5th policy year, coverage might have been allowed.

Terms of the pre-existing illness clause

Some of the important terms associated with the coverage of pre-existing illnesses are as follows –

  • Pre-existing waiting period tenure:

    • The pre-existing waiting period is different across different plans. It usually ranges from 12 months to 48 months. If you suffer from a pre-existing condition, opt for a policy that has the lowest waiting period. This would ensure quick coverage.
    • Many plans allow you the option to reduce the waiting period at an additional premium. If you or an insured member suffers from a pre-existing condition, you can opt for this option. The waiting period reduces to 12 to 24 months.
  • Severe Illnesses:

    • In the case of severe illnesses, the coverage might be restricted altogether, even after the waiting period is over.
    • Sometimes, the insurance company might impose a coverage restriction. In that case, the coverage for pre-existing illnesses would be available but up to a specified limit.

Additional Read: Subrogation and critical illness insurance policy

  • Premium Loading:

    • There can be a loading on the premium depending on the severity of your pre-existing illness.
  • Waiting Period clause while Porting a health insurance plan:

    • If you port your existing health insurance plan, you get credit for the waiting period completed in the last plan. In the new plan, only the remaining waiting period would apply.
      For instance, say your existing plan has a pre-existing waiting period of 48 months. After 24 months you port to another plan which has a waiting period of 24 months. 
    • In this case, coverage for your pre-existing condition would start from Day 1 under the new plan. This is because you have already waited out the applicable 24 months in the last plan. 
    • If you enhance your sum insured on renewals or when porting, the pre-existing waiting period would apply from start on the enhanced amount.
      For instance, say the plan has a pre-existing waiting period of 48 months and you opt for a sum insured of Rs.5 lakhs.
       
    • After 24 months you enhance the coverage to Rs.7 lakhs. In this case, the pre-existing waiting period would be 24 months on the existing sum insured of Rs.5 lakhs. However, for the enhanced amount of Rs.2 lakhs, the waiting period of 48 months would apply.

Declaring pre-existing conditions when buying health insurance

When you are buying a health plan, you should declare any pre-existing illness that you suffer from. This is because the illness is an important factor that affects your health risk. The insurance company needs to know the risk to underwrite the policy and fix the right premium.

If you hide the information or lie about having any pre-existing illness, the following would happen –

  • Any subsequent claim arising out of the illness would be rejected, and
  • The policy will become null and void

The insurance company would hold you responsible for not declaring your medical illness. Besides rejecting the claim, it might cancel the coverage altogether. The insurer would forfeit the premium as well. In certain cases, you might also suffer from legal complications.

Insurance policies are contracts of utmost good faith. They require you to divulge all information, honestly, to the best of your knowledge. If you hide or lie about your pre-existing conditions, you breach the basis of the contract. As such, the policy is considered null and void and you are denied coverage. 

Furthermore, it might prove challenging to find another insurer willing to offer you coverage after the existing insurer calls you out on non-disclosure and/or misrepresentation. 

What should you do?

If you or an insured member suffers from a pre-existing condition, you should always mention the same when buying a health insurance policy. The only implication of such a declaration can be one or more of the following –

  • An increase in the premium
  • A restriction on the coverage

Besides these, coverage under the plan would be ensured. You would just have to wait out the waiting period after which the plan would cover your pre-existing conditions. Even if you exclude the conditions, you can enjoy coverage for other illnesses or injuries that you might suffer.

Additional Read: Are OPD and consultation covered in Family Health Insurance plans?

In conclusion:

So, abide by the principle of utmost good faith when buying a health insurance policy. Declare all medical complications that you have and get the policy in good faith. Enjoy the coverage that the plan has to offer and secure your finances against medical emergencies.