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Pre - Existing Disclosures

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21 Feb, 2021 by  Manjunath Prasad

Hi Sir, Please help me with some clarity on the following -

1. I have seen many policies clearly define pre existing disease as the one which you got diagnosed/consulted/had symptoms, etc. only in the last 4 years. So, if I had a condition and got cured before 4 years, ideally I don't need to declare, right? So, don't you think, declaring something that was cured like long long back is not essential? If it even later becomes a dispute, don't you think IRDA will favor the Customer purely based on the definition of the pre-existing disease.

2. Don't you think overdoing in terms of disclosure may lead to rejection that will lead to more rejections given that you need to declare the previous policy rejections making the exercise counter productive. While its true that different companies are differently risk averse, I feel that as a business, they would rather find another customer for 5k premium instead of a risk of losing lakhs even if the risk is miniscule.

3. Recently PED definition got changed. IRDA guidelines say only those diseases which have been "consulted" in the last 4 yrs can be termed as Preexisiting. Is this amendment optional or is enforced. Please review how this amendment works out. 

4. An year back, I increased Sum insured for Super topup during Renewal with HDFC ERGO, an year after a minor surgery which was paid by Base policy of Religare. During Sum Insured increase procedure, they just sent a separate payment link with Insured amount. HDFC didn't ask for any disclosure. I even called the customer care if I have to disclose afresh of any recent developments. They said its not necessary, normal waiting period may apply for the increased insured amount. This is the general customer care department I talked to, not the underwriting/medical team. So, what may go wrong now? Should I inform them now ?

5. Its mentioned in the forum that the company will somehow find out about the diseases. Can you tell me how exactly, when there's no information trail whatsoever when the mention of any unrelated disease is not in any current reports unless the doctor tells you to mention. Its not like the medical history is linked to some PAN Card that they would have all the financial info in the CIBIL report, right? I am curious. Please shed some light. I see doctors take the customer side in reporting only what's absolutely necessary and that too only regarding the current condition as they feel the Insurance company will look for loopholes. 

6. Based on your experience, please name a few companies which accept policies for pre-existing disease more readily with/without premium loading.

Health Insurance

2 Answer

27 Feb, 2021
Gaur Nitai

Great question

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09 Mar, 2021
Co-founder, SureClaim

Hey Manju,

These are great questions. Here's point by point reply.

1. Question you should ask yourself is - do you want your claim easily or do you want to get into dispute and block your money. I know a lot of people just want to act smart, but please don't. You think you understand rules, but you don't. What you read and how it is executed is beyond your grasp. My advice - whatever medical history you have whether it's recent or very old, just declare. Don't try to withhold information of any sort because it will come back to bite you hard.

2. Your second question is very relevant. Most people believe getting a health policy is like getting crossing a safety line. So they need to cross the line at any cost and if they do, they think there is nothing wrong possible to happen now. This is far from being true. Insurers assess risk on a continuous basis. If you crossed the line and somehow got policy by witholding information, it will come out somehow. Don't ask me how it will, but remember your medical history has many creative ways to come out in open against your wish. That day, insurer will reject your claim citing non disclosure and in extreme cases, even reject your policy. There is no such thing as overdoing disclosure. Anything that is worthwhile for risk assessment must be told to insurer. If they don't want to give you policy, be happy, you saved your premiums. Because if somehow you get the policy, your medical history will come out and you'll lose your claim and your premiums.

3. What IRDA says is a mechanism how insurers should evaluate PED. Question - Are you skilled enough to evaluate what is PED? Damn, no. Customers are selfish, like insurers. And so they tend to think of information about PEDs in a very positive manner. For them, nothing is PED. After several hundred claim rejections I understood what is PED. Do you have the same experience? Hell, no. So why unnecessarily try to beat the definition. Just declare. I don't see the point in fighting the disclosure. This itself gives a feeling something is fishy.

4. Yes you must inform HDFC about the 'minor' surgery. From HDFC's stand point, you didn't inform or disclose the surgery for the additional risk cover you bought. There is no documentation, which is acknowledged by HDFC, that you tried to disclose. None of those calls with call centers are going to help. I know customers are happy to record such calls, this is adventure journalism. Kuch hua to dekh lenge, court mein le jayenge insurance ko. What they don't do is take responsibility of their own actions. Just drop an email. Just insist that you want to record the PED. How is HDFC going to know if the claim was filed in Religare base policy?

You are a smart guy. You know what just happened, and yet you're waiting for the inevitable to hit you and hurt you. Why?

Drop an email to HDFC, make sure they acknowledge, make sure they put it in writing that they have considered this piece of information, and then if they feel they want to use this PED for imposing 4 yr waiting period on it, let them do it.

A non-disclosure, however minor or inconsequential, will be held against you to reject your claims. And no, IRDA won't save you. I can't save you.

5. Doctors are gifted humans, very very knowledgeable about HUMAN BODY. On the other hand, they're small kids when it comes to their knowledge of Insurance. I know they sound confident and 'know all', but seriously, they know zero. They tell patients what patients love to listen. Insurance may not be amused with that information.

It is not appropriate for me or anyone to tell you how information collection works, but believe me it is a very advanced system to catch non-disclosures and frauds. There's no new trick you've thought that insurers haven't caught already.

So no I am not going to explain how it works, but just understand that it works beautifully. Don't try to beat it. Just accept outcomes that come with disclosure. They're in your best interest.

6. Your question is very open ended. If the PED we're talking about is cancer or chronic kidney disease, I bet no insurer will underwrite that risk favourably. But if you're talking about gall bladder stone surgery or a uterus removal, there could be differential approach by various insurers based on age of the proposed person. So it's hard to give a one-size-fits-all answer because it is a matter of risk selection and not an easy one to predict without knowing the medical history.

What I can tell you from experience is that I find Max Bupa to be very sensitive to even the less severe PEDs also vs maybe other insurers, but again, this experience is in context of those PEDs that I've encountered with customers. My assessment is with very limited data.

Hope this info is helpful.

Anuj Jindal



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