PERSONAL ACCIDENT INSURANCE

 

PED (Pre Existing Disease) in Health Insurance

With many media platforms encouraging people to buy Health Insurance at a young age to maintain continuity of cover and gain wider cover, choosing the right Policy/Plan is an uphill task .Buying Health Insurance is an absorbing activity as there are a lot of terms and conditions, caps, exclusions etc. in the fine print of the policy which the buyer is unaware.

One such is PED or the preexisting disease condition.

What is PED?

A medical illness or injury that exists before the inception of a fresh health policy, is considered a pre-existing condition. Conditions like asthma, diabetes hypertension, thyroid are examples of pre-existing health conditions. They tend to be chronic or long-term.

What is a pre-existing disease according to the IRDA?

Pre-Existing Disease means any condition, ailment or injury or related condition(s) for which there were signs or symptoms, and were diagnosed, and for which medical advice ,treatment was received within 48 months prior to the first policy issued by the insurer and renewed continuously thereafter.

Ø  Any condition, ailment, injury or disease that has been diagnosed up to 48 months before buying your first health insurance policy.

How do we know whether we have PED?

Small ailments like cough cold allergy do not come under preexisting disease as they are not chronic and are situational and stress related. However prolonged & recurring condition or ailment must be declared in the proposal form.

What happens if we don't disclose pre-existing condition?

The contract of insurance is based upon principle of Uberrima fides -Utmost Good Faith which means that the proposer is bound to disclose all relevant facts within his knowledge including his/her pre-existing diseases, because this forms the basis, for the insurance company to arrive at the decision of assuming cover for the proposer and at what terms and conditions, premium amount, coverage etc.

Not declaring pre-existing medical conditions will not only lead to claim rejection, but the policy will also be considered null and void.

What is material to the claim or not is an important aspect

For example- A was a happy 50 year old enjoying life to the full until he was suddenly diagnosed with heart disease. He was suffering from back pain and muscle related illness for a long time. He was under good medication and fine, however a stroke changed his life.

The Health policy that he had taken refused to settle his claim as he had not disclosed the medical condition correctly at the time of the proposal.

A argued that the medical condition not disclosed by him was not material to his heart attack at present. The Insurer negated his account and cited Non-Disclosure clause.

Insurance company argued that the proposer has intentionally and deliberately hidden his/her pre-existing disease(s) in order to save the premium amount thereby causing financial loss to the  company and the insured has  violated the principles of utmost good faith – the basic principle of Insurance. Hence the claim was not payable.

Non-disclosure has two sides:

Ø  The insured knew that he/she is suffering from a pre-existing disease and intentionally omits to mention the same in the insurance policy

Ø  The insured himself is not aware of that he/she is suffering from a certain disease or assumes a symptom to be routine pain, for example a person may mistake a chest discomfort to be a sign of gas or acidity rather than an underlying heart problem.

The point to examine is whether the nondisclosure is material to the current ailment or not. If the nondisclosure was not material to the claim, the Insured may get away with the claim with the help of various Court judgments in the matter. However this is a prolonged process.

If the insured was unaware of the hidden ailment then the Courts have held that where suppression of any material facts was done by the insured which is not in the knowledge of the Insured, then the benefit of doubt is given to the insured.

 

Insurance is a contract and utmost good faith is the key between the proposer and the insurer. It is important to maintain good faith and disclose facts in the proposal form to avoid unnecessary disputes in the event of a claim and it is in the best interest of both parties-Insured and the Insurer.

We at Zen Insurance help in choosing the right coverage that fits your needs and budget. Plan your Health Insurance Program wisely and contact us for assistance.

 Disclaimer:   

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products