How do I buy health insurance that covers pre-existing disease?

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How to Purchase a Health Insurance Cover with a Pre-Existing Condition?

Health insurance is essentially a service wherein the insured person(s) wishes to safeguard himself/herself, or any other insured persons under the policy, against the costs to be incurred to treat different health conditions. The health insurance cover continues to offer protection to the policyholders if the premiums are paid on time. Health insurers determine the premium based on several factors that impact the risk factor involved in the transaction.

This means that the higher the risk, the higher is the liability of the health insurance service provider. As a result, health insurance companies always attempt to balance the premium charged and the risk involved. The general principle followed by health insurance companies is that the higher the risk of an insured event happening, the higher should be the premium for the health insurance policy. This allows insurers to reduce their financial liability while also offering the best services to the insured person(s).

What does a pre-existing health condition mean?

What exactly do we mean by 'pre-existing condition'? In simple terms, a pre-existing health condition refers to some medical issues that you or any other insured person(s) have been suffering from when subscribing to the health insurance policy. For example -
Let's assume that you tested positive for Type-II Diabetes a few days back. If you purchase the health insurance now, your health insurance will not cover any treatments or hospitalization incurred due to this condition. The reason is that it, in this case, diabetes is a pre-existing condition. The insurance provider will not be liable for the costs incurred for treatment of this condition till the specified waiting period has been completed. In most cases, the waiting period is 48 months.

When it comes to pre-existing diseases, people are often in a conundrum as to whether to declare the condition at the time of purchase of policy or not. The higher premium usually brings about this doubt that they will have to pay because of the higher risk associated with it. However, it is advisable to declare the pre-existing condition when purchasing the health insurance plan. The simple reason behind it is to avoid future complications arising out of your pre-existing disease at the time of claiming the insurance benefits. Even though it may cost a little more, at least you will have the security of insurance coverage if you ever need it!

Having a pre-existing health condition directly translates to a higher degree of risk for the insurer. To reduce their financial liability, health insurance companies will charge higher premiums. This premium amount in the case of a person with a pre-existing condition is higher when compared to the premium for someone who does not suffer from the same condition.

Understanding waiting periods in a health insurance plan

Every health insurance plan has a waiting period regardless of whether the policyholder has any pre-existing diseases or not. This is the period from the purchase of the insurance plan wherein the insurance company will cover no claims for any of the specified health conditions. There are typically three types of waiting periods that are applied in different situations, such as: -

1) General waiting period

Most health insurance plans have a default minimum waiting period of about 30 days to 90 days. Until this waiting period has lapsed, no insurance claims will be entertained or accepted by the insurance service provider unless the hospitalization is due to an accident. Now, the general waiting period is only a requirement to fulfil when purchasing a new health insurance plan. A person with an already existing health insurance plan will not have to undergo the minimum waiting period if he/she is simply renewing the tenure of his plan.

2) Waiting period for a pre-existing condition

While purchasing a health insurance plan despite having a pre-existing condition or disease, there is a longer waiting period involved. Now, this specific waiting period is only concerning the pre-existing disease. However, any other health issues that are coverable by the health insurance plan will be covered. The average waiting period for pre-existing diseases can range between 24-48 months. While this varies across insurers, the waiting period is typically calculated based on the risk of the disease, age, and other factors.

3) Waiting period for specific ailments

While insurance plans for pre-existing conditions come with a waiting period specified for that disease, another type of waiting period is similar. The waiting period for specific ailments is a prescribed waiting period for specific ailments that you don't have yet, i.e., the ailment is not a pre-existing disease. Health issues such as hypertension and diabetes are included in this waiting period. The average waiting period is typically between 12-24 months. During this time, no insurance coverage will be provided for the diseases included in the list of specific ailments.

How can you buy insurance coverage for pre-existing diseases?

Now, it is time to discuss how you can purchase insurance coverage for a condition that you already have at the time of purchasing the policy? The ground rules are simple – first and foremost, get a medical examination conducted. Second, bear in mind that even though your premium might be higher, you will be sure to get an insurance coverage after the waiting period is over. Therefore, you must disclose the existing health condition to avoid complications when filing a claim.

An added benefit for insurance buyers is that, as of 2020, the IRDAI has amended the definition of pre-existing diseases with the following categorical objectives –
- reducing rejection insurance claims under the garb of 'pre-existing diseases',
- reducing the number of ambiguities for both insurance providers as well as policyholders,

According to the old definition of pre-existing diseases, any disease that any physician-diagnosed within 48 months before the effective date of the policy issuance is known as the pre-existing disease. Further, any condition for which symptoms/signs are presented and have resulted within 3 months of the policy issuance in a diagnostic illness or medical condition is also considered a pre-existing disease. As per the amendment by IRDAI, the 3-month clause has been deleted. Therefore, any disease diagnosed within 3 months of purchasing the health insurance plan is not considered a pre-existing illness. Hence, insurance coverage for these illnesses and diseases is now easily available for the policyholder.

Now, as a buyer, you must remember that every insurance provider is bound to have different rules around the issue of pre-existing conditions and insurance coverage. Therefore, it is your responsibility to understand the terms and conditions required for insurance coverage for that ailment. Some insurers may demand a comprehensive medical history, whereas some only want a general history. Further, during the waiting period of a newly purchased health insurance plan, no insurance coverage will be provided for the pre-existing diseases. However, you will be eligible to avail of the insurance coverage for the treatment of pre-existing diseases once the waiting period is over.

Bear in mind that you won't be denied health insurance simply because you have a pre-existing disease. However, you will have to pay a higher premium. If the waiting period worries you, you will also find options to pay a higher premium to rid your health insurance plan of the waiting period.

Your pre-existing disease does not disqualify you from availing of the benefits of health insurance. However, to reap the full extent of these benefits, you will have to shell out more money on your premiums. Moreover, no pre-existing disease should be concealed while subscribing to a health insurance plan. This could lead to the rejection of any claims made for that specific disease under the active insurance coverage. Be sure to understand the terms and conditions regarding the waiting period and extent of insurance coverage concerning pre-existing diseases. While this may result in higher premium payments, it assures your peace of mind and security in the long run.

FAQs

  • How are pre-existing conditions determined?

    Generally, health insurance providers consider a disease to be a pre-existing condition if a licensed practising medical physician has diagnosed it within two years before actually purchasing the health insurance plan. Until 2020, even diseases diagnosed within three months of purchasing the health insurance were pre-existing diseases. However, according to the IRDAI's amendment in the definition of 'pre-existing diseases', that clause has been struck down. Therefore, if diseases are diagnosed within three months of purchasing the health insurance plan, they are not considered pre-existing diseases.

  • Can I be denied if I have a pre-existing condition?

    No, you cannot be denied health insurance benefits even if you have a pre-existing condition. However, the fine print and the conditions for you to effectively avail the benefits and insurance coverage must be carefully perused. Typically, it would involve paying higher premiums against your health insurance and a longer waiting period. Nonetheless, once these conditions have been met, you are eligible for insurance coverage even if you have a pre-existing condition.

  • Could my health insurance have a pre-existing condition waiting period?

    Almost certainly, most health insurance plans have a waiting period for pre-existing medical diseases. Typically, this waiting period could be as short as two years or as long as four years. While this may seem like an undesirable option, health insurance providers also offer the option of bypassing that PED (pre-existing diseases) waiting period. To do so, the health insurance policyholder must pay a certain waiting period waiver fee. Following this waiver, the waiting period for pre-existing diseases is either reduced or removed, and benefits of the insurance can be accrued.

  • What if I am aware of a pre-existing condition and do not disclose it?

    Health insurance buyers are strongly advised to disclose their knowledge of pre-existing diseases before purchasing a given health insurance plan. Not only does hiding such relevant information result in complications at the time of claiming insurance coverage, but it also could lead to disqualification of the claim altogether. The reason is that there is a prescribed waiting period for pre-existing diseases during which period such a claim will not be entertained.

  • Does a pre-existing illness have any impact on the amount of coverage?

    No, the amount of insurance coverage is not impacted if you have a pre-existing illness when purchasing a health insurance policy. However, having a pre-existing disease affects the amount of premium you pay toward your insurance and the waiting period. Typically, the premium amount rises when the insured person is suffering from a pre-existing illness. Along with the rise in premium, there is also a long waiting period. During this waiting period, no insurance claim related to the treatment of the pre-existing illness will be entertained.


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