Was Your Insurance Claim For A 'Pre Existing Disease' Rejected? Here's Some Good News!
Feb 12, 2020

Author: Aditi Murkute

Was Your Insurance Claim For A 'Pre-Existing Disease' Rejected? Here's Some Good News!
(Image source: Medical vector created by macrovector - www.freepik.com)

Have you been rejected a Health insurance claim on account of a pre-existing disease? Well, here's good news you probably aren't aware of!

Last September (2019), a circular about several permanent exclusions in health insurance and about pre-existing disease (PED) claims was issued, which my colleague Divya covered.

As per the September circular, IRDAI defined a list of 16 ailments that remain under a permanent exclusion list. This means, the policyholder will not be entitled to make claims related to ailments on that list. Earlier, the list of diseases under permanent exclusion list varied with each insurer.

And with regards to pre-existing disease, the regulator stated that the waiting period for temporary exclusions cannot exceed 48 months. If suppose the policyholder wishes to port the cover to another insurer, the policyholder needs to serve waiting period of 48 months in total. The new insurer cannot impose a fresh waiting period.

Further, if the policy holder is diagnosed with a serious ailment within three months of buying the policy, it will be treated as pre-existing disease and the waiting period will be applicable.

Later, in this week, the Insurance Regulator and Development Authority of India (IRDAI) issued a new circular regarding Amendments in respect of provisions of Guidelines on Standardization of Exclusions in Health insurance Contracts and Modification Guidelines on Standardization in Health insurance

As per the circular a part of earlier definition for pre-existing disease is now removed. Pre-existing Disease means a condition, ailment or injury or disease that already exists at the time of buying a health insurance policy.

[Read: Why You Should Buy A Health Insurance Policy For Your Newborn Asap!]

Here is the old version and modified version of definitions for PED, which is not applicable for Overseas Travel Insurance.

  • Old Pre-existing Disease definition includes any condition, ailment, injury or disease:
    • That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or
    • For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy or its reinstatement.
    • A condition for which any symptoms and/or signs if presented and have resulted within three months of the issuance of the policy in a diagnostic illness or medical condition.
  • New Pre-existing Disease definition includes any condition, ailment, injury, or disease:
    • That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement.
    • For which medical advice or treatment was recommended by, or received from, a Physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement.=

As per both the versions, Life insurers may define norms for applicability of PED at Reinstatement

This is because, the regulator aims to standardise the exclusions in health cover and ensure that more number of illnesses are covered under the policy and reduce rejection of claims.

In terms of exclusions also, Exclusion K (Excluded providers: Code- Excl 11) has been tweaked. In the older version, regarding the expenses incurred towards treatment in any hospital or by any Medical Practitioner or any other provider specifically excluded by the lnsurer and disclosed in its website / notified to the policyholders are not admissible. However, in case of life-threatening situations following an accident, expenses up to the stage of stabilization are payable, but not the complete claim.

Whereas in the modified version, expenses incurred under specifically mentioned exclusions disclosed by the insurer remains. But now for partial settlement of expenses up to the stage of stabilization payable could be for life threatening situations or following an accident.

These details of excluded providers shall be provided with the policy document. lnsurers to use various means of communication to notify the policyholders, such as e-mail, SMS about the updated list being uploaded in the website.

In the earlier version of Exclusion Q (Birth control, Sterility and lnfertility: Code- Excl17) Birth control was also a part. But the new exclusion doesn't include "Birth control" and is stated below.

Exclusion Q (Sterility and lnfertility: Code- Excll 7): Expenses related to sterility and infertility. This includes:

  • Any type of contraception, sterilization

  • Assisted Reproduction services including artificial insemination and advanced reproductive technologies such as IVF, ZIFT, GIFT, ICSI

  • Gestational Surrogacy

  • Reversal of sterilization.

The regulatory body as mandated lnsurers and Third Party Administrators, wherever applicable, to make a note of the above changes and ensure compliance.

Remember, financial and health security are the basic tenets for an individual; the purpose of insurance is indemnification of risk from an untoward event. Having medical insurance will make sure that the journey ahead is smooth and stress-free. However, as far as wealth management is concerned, it is best to keep insurance and investment needs separate.



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