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
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