Declare all pre-existing diseases or your health insurer will reject claims

It is common knowledge that COVID-19 impacts those with co-morbidities the hardest. But there is one more reason why co-morbid patients need to be wary of. They should have disclosed their pre-existing illnesses at the time of buying an insurance policy, all those years ago.

Although non-life insurance companies cover the cost of COVID-19 treatment along with that of pre-existing illnesses, there have been instances of firms rejecting claims citing non-disclosure of prior illnesses.

Take for instance the case of 50-year-old Sujay Singhi (name changed) who was hospitalised for COVID-19 in April. He suffered from hypertension at the time of buying the policy in 2016. But Singhi left the process entirely to the insurance distributor who failed to mention it in the proposal form. His COVID-19 claim was rejected when the insurer discovered his condition in his medical files shared by the hospital. “Insurers can decline claims and even cancel the policy, in case they find important facts being hidden or misrepresented at the time of buying the policy,” explains Mahavir Chopra, Founder, Beshak.org. Your claim could suffer even if your treatment is not related to the undisclosed ailment. “For instance, if you conceal your history of hypertension, but are hospitalised for Vitamin deficiency, the claim can still be declined and policy cancelled,” explains Chopra.

“Many ignore declaring pre-existing illnesses and health conditions at the time of policy purchase. Conditions such as diabetes and hypertension have resulted in a lot of patients becoming critical,” says Shreyans Vijay, Head of Fisdom. Complete disclosure of past history is important even in for Corona Kavach policies, which specifically cover co-morbidities along with COVID-19 treatment. “Co-morbidities increase the overall risk for the insurer and (non-disclosure) can be considered as misrepresentation, and hence rejected,” says Dr Sudha Reddy, Head-Health Insurance, Digit Insurance.

How the past can come to haunt

“Trends indicate that people with co-morbidities are at a higher risk in terms of severity of COVID or even post-COVID consequences. Insurers accept the proposal in good faith on the basis of the declarations made by policyholders for medical history and pre-existing diseases,” Udayan Joshi, President-Claims & Personal Lines Underwriting, Liberty General Insurance. If you do not declare your ailments, it can be seen as breach of faith.

The regulator IRDAI defines pre-existing diseases as any condition, injury, ailment or disease, which is diagnosed by a doctor within 48 months prior to the effective date of the health insurance policy. It is a disease for which you have received medical advice or treatment during this period. Such illnesses are usually covered only after a waiting period of up to four years.

However, your entire medical history – and not just ailments during the 48-month period – will be taken into account while issuing the policy. “Disclosure has nothing to do with the pre-existing disease waiting period. You will have to disclose all health conditions you suffered from as requested by the insurance company. The insurer will have the right to approve or disapprove cases based on this information,” says Chopra.

Let’s say you recovered from infectious diseases such as H1N1 Influenza or Tuberculosis more than 48 months prior to buying the policy. You have not sought treatment in these 48 months. Here, once the insurer agrees to issue a policy, it cannot prescribe waiting periods for such diseases. “Insurers do accept such proposals without any extra conditions or premiums if the ailments are non-significant in nature. If the pre-existing conditions are declared while submitting the proposal, then there are fewer chances of getting queries at the claims stage. On the contrary, non-disclosure of critical information may invite additional questions to evaluate each case on medical grounds,” says Joshi.

The 8-year glitch

Usually, it’s the chronic conditions that matter more at the time of underwriting, but infectious diseases are not completely out of bounds either. Sajeet Nambiar (name changed) discovered this the hard way in April when he had to be hospitalised for COVID-19 treatment. He had recovered from Tuberculosis in 2007, but did not mention this in the proposal form while buying his health insurance policy in 2012. The insurer rejected his COVID-19 claim on the grounds of non-disclosure of material information. This, despite the fact that his policy had been in force for over eight years.

As per IRDAI guidelines, if you renew your policy continuously for at least eight years – referred to as the moratorium period – it becomes incontestable, except in cases of proven fraud. “The regulator has now given a window of eight years. This means any pre-existing disease in the last eight years before taking the policy has to be disclosed. If a policyholder does not disclose any ailment that was contracted over eight years ago and it is not found in the last eight continuous years of the policy, it can no more be considered non-disclosure or pre-existing disease,” explains Dr Reddy.

Some insurers, however, see this non-disclosure as misrepresentation. “A lot depends on the questions in your proposal form and your responses. Insurers’ interpretations could differ. For instance, the insurer might have asked if you had ever been hospitalised or, say, were on medication for over three months. Past history of Tuberculosis or lung infection constitute material information. If you conceal information, it could be seen as breach of trust or fraud,” explains Amit Chhabra, Head, Health Insurance, Policybazaar.com.

It is best to disclose your entire medical history without any omission, though insurers are likely to pay more attention to recent health history rather than illnesses such as Malaria. Transparency is ideal even if it means paying higher premiums. “It is always better to over-communicate. If you hadn’t declared any pre-existing disease earlier, you should come forward and declare it later. Else, your claim could be rejected after having paid premiums for several years,” adds Chhabra.