Health insurance is like an emergency loan in the sense that you might not get it when you desperately need it. The reason is quite simple - insurers find it risky to cover individuals who have a pre-existing medical condition. Such people have a higher chance of falling sick and undergoing hospitalization, leading to a higher probability of claims. Therefore, the chances of getting health insurance decrease significantly if you have a pre-existing disease. Even if the Insurer(s) gives you coverage, it comes at increased prices.
Pre-existing disease Effects on your health insurance: What you need to know
According to the IRDAI, any medical condition that has been diagnosed or treated (or recommended to be treated) by a medical professional within 36 months of applying for health insurance is known as a pre-existing disease.
(Note: Earlier, a pre-existing disease was any disease or condition that was diagnosed, treated, or sought medical advice in the last 48 months. This has been changed to 36 months, from 1 April 2024.)
A pre-existing disease can affect your health insurance plan in several ways. In this article, let’s learn the impact of pre-existing disease effects on your health insurance.
What are the effects of pre-existing disease on your health insurance?
If the insurer knows that you suffer from a pre-existing disease, they can -
👉 Apply loading charges
If you have a pre-existing disease, getting health insurance can be difficult because most insurers are likely to impose loading charges on your policy. As a result, you will be required to pay a higher premium, calculated as a percentage of standard premium rates, to buy a health insurance policy. The loading charges can differ from insurer to insurer. Some insurers impose a loading of 10%, whereas some insurers can impose a loading of 50% on your premiums for certain pre-existing diseases.
👉 Apply for waiting periods
Under certain conditions, some insurers can put a waiting period over your policy on pre-existing illnesses for which you can avail the cover only after a pre-defined number of days. The waiting period for pre-existing diseases can be up to 3 years, and it differs from insurer to insurer. During the imposed waiting period, if you are hospitalized for your pre-existing disease or a condition that’s traced to a PED, the expenses won’t be covered under your policy.
👉 Impose permanent exclusions
Earlier when people were diagnosed with a pre-existing disease, it would hold a huge impact on the insured person's health, and many insurers would completely decline the entire cover in order to not take any risk. However, the recent IRDAI guidelines allow insurers to apply a permanent exclusion if a pre-existing disease holds a major effect on the insured person’s health for a long time.
So, if you have a pre-existing disease and the insurer thinks they can’t afford to take the risk, they might offer you health cover but exclude that disease permanently. This implies you can claim for all other illnesses and injuries except for the pre-existing disease.
👉 Impose restrictions
Most insurers can impose restrictions such as additional copay if you make a claim that is related to your pre-existing disease. This means you will have to take the responsibility of paying a fixed amount of expenses for the treatment of your pre-existing disease. The other part of the expenses will be paid by your insurer.
For example, if your policy has a copayment clause of 10%, and you get hospitalized for treating your pre-existing disease, the hospital bill amounts to INR 10 Lakhs. In such a case, you’ll have to pay 10% of the bill i.e. INR 1 Lakhs out of your pocket. And the insurer will pay the remaining amount.
👉 Reject the policy
In some cases, if the insurer feels that the details you provided with regard to your pre-existing diseases are too complex or feels that there could be a risk in offering you a cover, then the insurer can reject your policy.
For example, Jannat has been struggling with Asthma before buying the health insurance policy. In such cases, depending on the severity of the condition, the insurer can reject her policy if they feel that it is quite risky to offer her a health insurance cover.
So, these were some effects of pre-existing diseases on health insurance. If you have any questions or doubts related to pre-existing diseases and health insurance, you can post them on the MyInsureBuddy Insurance Forum and get your answers from experts, for free!