When Delhi resident Kriti Mehta (name changed) and her husband Girish ported their health insurance in 2020, the aim was to save money on premiums as the new insurance company was offering cheaper insurance. Was that. But little did they know that the switch would come at a higher cost.
The couple had purchased family floater insurance from an independent private health insurance company in 2018. In 2020, Mehta underwent a hysterectomy.
“Two years later, the insurance company transferred her policy to another insurance company to take advantage of lower premium rates, but did not disclose the procedures she underwent in 2020,” Victim Insurance said. Shilpa Arora, chief operating officer of Insurance Samadhan, a platform that supports Policyholders escalate complaints against insurance companies.
Earlier this year, Mehta developed complications from surgery and had to be hospitalized again. “The new insurance company denied her claim due to non-disclosure of the hysterectomy,” she said.
Also read: If you don’t declare all your pre-existing conditions, your health insurance company will deny your claim
This is not unusual. According to the Mumbai Insurance Ombudsman’s Office, denial of claims on the grounds of suppression of pre-existing conditions is the biggest cause of claim denial.
What is a pre-existing condition and why is it important?
Any health condition, injury, illness, or illness that was diagnosed and treated before you purchased your new insurance policy is called a pre-existing condition.
These illnesses are typically only covered after a waiting period of one to four years, depending on the product and insurance company. Insurance buyers must disclose any previously diagnosed illnesses or conditions.
Insurance companies calculate premiums and decide whether to issue insurance contracts based on underwriting – risk assessment – insurance contracts. Typically, people with diabetes (type 1 and type 2), high blood pressure, heart-related problems, or other medical conditions have to pay higher premiums.
However, there is no additional premium for illnesses that are treated and cured, such as H1N1 influenza or appendicitis.
Also read: Moneycontrol-SecureNow Health Insurance Rating: A guide to focus on the right insurance
What happens if information about pre-existing conditions is concealed when signing an insurance policy?
When a policyholder is admitted to the hospital, doctors will take a complete medical history of the patient, making it very likely that a hidden illness will be discovered. The insurance company may deny such a claim, or worse, cancel the policy, on the basis that important facts were withheld at the time the policy was written.
“An insurance company’s response when non-disclosure is discovered varies by product and underwriting guidelines. If the product’s underwriting guidelines do not allow for diabetes patients, and the policyholder hid their diabetes at the time of purchase. , this amounts to a significant restraint and will result in no claims being paid,” said Babatosh Mishra, Head of Underwriting. Niva Bupa Health Insurance Claims and Products.
Can an insurance company cancel your policy if your hospitalization is not related to an undisclosed health condition?
Even if the illness you are being treated for is not related to the concealed condition, your insurance company can cancel your coverage for misrepresentation of your health condition. If the coverage is a family floater policy, other family members will also have to pay due to the error.
Also read: How to use Moneycontrol-SecureNow Health Insurance Rating
Do old illnesses known to my existing insurance company need to be disclosed to my new insurance company when transferring my policy?
Porting refers to the process by which a policyholder switches to another insurance company while retaining continuation benefits such as waiting period credits. Although it is best to disclose all illnesses, your new insurance company will also need access to your claims history from your existing insurance company.
“One of the biggest problems today is that policyholders don’t share all their health information at the time of transplant. Insurance companies can exchange billing information, but all medical records are coming in. That is not the case,” Mishra said.
Non-disclosure may result in your claim being denied and your insurance policy being cancelled. “It is a very common problem for insurance companies that policyholders switch to deny claims based on these reasons (non-disclosure of pre-existing conditions). In many cases, people undergoing transplants They do so because they are looking for cheaper insurance. To keep premiums low, they often do not disclose illnesses they may have had during previous policies,” says Securenow.in Collaborative Founder Kapil Mehta said.
Insurers, intermediaries, and policyholders often rush to close deals and pay less attention to the disclosure of health information.
“With pressure to meet sales targets in order to earn commissions, insurance company agents often do not educate policyholders about the importance of declaring pre-existing conditions. The policyholder leaves the task of entering all health details to the intermediary, who simply declares the health condition.”To avoid rejection of the application, it is necessary to ensure that the health condition is good. “We believe that the public should only share details of the continuing benefits they are eligible for, not their health history. Insurance companies see this as a cover-up.”Consumers said rights activist Jehangir Ghai.
What happens if a new situation arises during the policy period?
These must also be disclosed.
How will the eight-year moratorium mandated by the Insurance Regulatory and Development Authority of India help?
The grace clause, introduced in 2019, is intended to provide relief to policyholders who are worried about settling claims after paying premiums for years. “The overall idea is that after the moratorium period ends, concealment of pre-existing conditions will not trigger the denial of a claim,” Mishra said.
The purpose is to ensure that a health insurance contract that has been in force for eight years cannot be challenged, except in cases of proven fraud or permanent exclusion. “Fraud is very different from not disclosing a lifestyle condition such as cholesterol or mild hypertension. Failure to declare something more serious, such as kidney failure, for example, could be considered fraud.” Mehta said.
However, some companies may interpret non-disclosure of your illness as fraud and deny your claim. However, any such refusal may be escalated to the Insurance Ombudsman.
“We assist consumers in filing complaints with the Office of the Insurance Ombudsman regarding claim denials on the basis of concealment of material facts (illness). Our customer’s case is stronger and ultimately ends up on the winning side if the insured’s illness has been treated for four years prior to the insurance purchase. ” Arora said. .
Guy recommends going directly to the Consumer Court rather than the Insurance Ombudsman’s office.
If a policyholder did not declare a health condition before purchasing the policy, can they do so at renewal time?
If your illness was hidden before you purchased the policy and you are concerned about claim denial due to non-disclosure, you can try to disclose it as soon as possible, even after the policy has been issued. However, there is a possibility that the policy will be discontinued.
“But it is better to come clean and deal with the consequences than to live in fear that your claim will be rejected and your policy discontinued in the future,” Mehta said.