A medical insurance coverage is supposed to pay for remedy of diseases that you just would possibly contract in future, in addition to accidents.
Nonetheless, you probably have pre-existing illnesses equivalent to diabetes or hypertension and declare it on the outset, your insurer may nonetheless provide the duvet, albeit at a better premium and ready durations of 1 to 4 years.
However what if you happen to fail to ― intentionally or in any other case ― inform your insurer of your pre-existing situation on the time of coverage buy?
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Price of not disclosing pre-existing diseases
Issues are certain to get difficult. In case you had been to file a declare later and the sickness will get found then, your insurer may reject the declare, or worse, cancel the coverage. The insurer can undertake this stance even when your remedy had been to not be associated to your ailment.
“If what you might have hid is a serious sickness that necessitates persevering with remedy, equivalent to diabetes, epilepsy or dialysis because of kidney illness, then the insurer will take cognisance of this,” says Sanjay Datta, Chief, Underwriting, Claims and Reinsurance, ICICI Lombard Common Insurance coverage.
However, fracture, cataract or appendicitis surgical procedure up to now won’t invite such censure. “Even having contracted COVID-19 within the final two years just isn’t a serious roadblock as of now. Nonetheless, persevering with remedy, crucial diseases or way of life situations must be disclosed,” he provides.
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Mend your methods throughout free-look interval
Now, you probably have stored the knowledge from the insurer on the time of shopping for the coverage, however the 15-day free-look interval (when you possibly can return your coverage) just isn’t but over, you possibly can rectify your error as quickly as potential. “If the declaration of pre-existing sickness is made by the policyholder throughout the free-look interval, an insurer has the chance to underwrite the coverage as per the relevant underwriting pointers,” says Parag Ved, President and Head, Tata-AIG Common Insurance coverage.
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Lacking this chance to right your mistake will imply risking the opportunity of coverage cancellation in future. “Failure to take action ― or within the occasion of misrepresentation, mis-description and non-disclosure of any substantial reality ― might outcome within the coverage being handled as void by the insurance coverage firm,” he provides.
However, you probably have paid premiums for at the least eight steady years, the Insurance coverage Regulatory and Improvement Authority of India’s moratorium guidelines will come into play and your coverage can’t be cancelled.
“If the pre-existing sickness is found after this era, then the coverage can’t be cancelled,” says Kapil Mehta, Co-founder and CEO, SecureNow Insurance coverage Brokers.
Additionally, in case you are recognized with any illness after you purchase the coverage, it won’t be a hurdle. “Medical health insurance insurance policies, by default, cowl diseases resulting in hospitalisation, which aren’t particularly excluded within the coverage. This additionally contains any illness which is unknown whereas the coverage is being bought or any new sickness which will get found. Due to this fact, clients don’t have to mandatorily disclose the (new) sickness on the time of renewal. Any new sickness won’t change the premium of the prevailing coverage,” says Yogesh Agarwal, CEO, Onsurity, an insurtech firm that gives medical insurance insurance policies on employer group well being platforms.
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Making disclosures at renewal of restricted use
Given the dangers concerned, well being policyholders are certain to surprise if they need to rectify their oversight at renewals.
Nonetheless, the voluntary disclosure needn’t essentially yield the specified outcomes because the insurance coverage firm will use its discretion. “Accepting the brand new disclosure is topic to the insurer’s underwriting coverage. The insurer might determine to simply accept and proceed the protection as it’s, or load the premium, or exclude the medical situation (that you’ve disclosed at renewal) or cancel the coverage ab initio,” says Ved.
This doesn’t imply that you must proceed to hide your well being situations. “It’s best to be clear and undergo with the results relatively than dwelling with the chance of declare rejection. Nonetheless, likelihood is that the coverage will probably be cancelled or not renewed,” says Datta.
Earlier than you inform your insurer, although, look to rearrange a back-up. “Attempt to ensure you have another choice in place. Look to declare your pre-existing illnesses whereas porting to a different insurer earlier than your renewal. See if the brand new insurer is prepared to increase the duvet,” says Mehta.
Being trustworthy is a should. “It’s essential to disclose your ailment whereas porting to a brand new insurer to keep away from any declare rejection and coverage cancellation at a later stage,” says Datta.
In case of shopping for a contemporary coverage, you’ll have to pay larger premium and endure a ready interval even when the brand new insurer decides to simply accept your proposal regardless of your well being situation. Nonetheless, the upper worth will probably be definitely worth the peace of thoughts this transparency can guarantee.