Health insurance waiting period: Pre-existing diseases, exclusions and free-look period explained

New Delhi: Health conditions may trigger a financial crisis if a person is not well-prepared for them. A person with an illness or someone who has suffered an accident would find themselves in an economically compromised situation if they have no health cover. Thus, health insurance should be bought early in life since it also comes with a waiting period, which varies based on the insurance terms and the illness.

Buying a policy does not ensure that the policyholder would be able to avail of it immediately. A person has to serve a waiting period, which generally extends up to 30 days. Any medical expense arising during this period would not be covered by the insurance company. Accidents are an exception, as they are covered from day one, subject to the terms of the policy.

Pre-existing diseases

The actual complication begins with pre-existing diseases. When a person has a prior health condition, the waiting period is extended. The guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) explain that the waiting period in such cases must not exceed 36 months from the commencement of the policy.

People with blood pressure, diabetes and other such lifestyle diseases, as well as people above the age of 60, must pay special attention to the clauses of the policy. People who are more likely to require health coverage must not pay attention only to the premium and the sum insured. The waiting period is equally important to them while determining the right policy.

A pre-existing disease while buying a health insurance policy is established on the basis of a diagnosis within 36 months before the commencement of the health insurance policy. Diseases or injuries for which medical treatment was received during this period are also considered pre-existing diseases.

Reducing the waiting period

Provisions exist to enable the waiving or reduction of the waiting period for health insurance. This usually involves an additional amount to be paid, which varies across different health coverage plans.

Disclosure

While buying a health insurance policy, a person must be very careful about disclosing prior health conditions, such as an ailment or an injury. Non-disclosure often leads to the repudiation of a claim.

Hiding a health condition at an earlier stage may cost the policyholder later, when money is needed and the insurance company rejects the claim.

Health insurance companies under IRDAI are required to provide a free-look period to customers. It is a period during which the policyholder can cancel the Mediclaim policy without paying any cancellation fee. The period begins when the person receives the policy documents and lasts for 30 days.

The free-look period is a good opportunity to review the terms of the policy and approach the insurance company if any correction or cancellation has to be made.