Policies covering pre-existing diseases from day 1 reduce anxiety

Watch out for limited sum insured in such covers

Typically, when a customer with a pre-existing disease (PED) tries to buy a health insurance cover, one of three things happens: His proposal is turned down; he gets the coverage but the PED is permanently excluded; or he gets it with a waiting period of two-four years.

Last week Aditya Birla Health Insurance launched a revised version of its plan, Activ Health Platinum, which offers coverage from day one for four PEDs—asthma, blood pressure, cholesterol and diabetes. A few other insurers also offer products that give day one coverage for PEDs (see table).

Demand for such products is high. "A person who has a disease lives in a state of fear. He wants immediate coverage for his disease and does not want to wait for four years," says S Prakash, managing director, Star Health and Allied Insurance. Adds Amit Chhabra, head-health business, Policybazaar: "Such customers are afraid that a claim may arise any day, so day one coverage is a feature they value."

Avail of coverage  

These products enable customers with PEDs to get insured. "The normal health covers are not available to customers who have a slightly severe case of, say, diabetes or heart-related ailments, or they may be available with exclusions. These specialised policies enable such customers to get insured," says Kapil Mehta, co-founder and managing director, Secure Now Insurance Broker.

Some insurers work with customers to manage their condition. "We provide each customer with a health coach," says Mayank Bathwal, chief executive officer, Aditya Birla Health Insurance. While this enables the customer to lead a healthy life, the insurer benefits by having to pay fewer claims.

Higher pricing  

The premiums of such covers are higher than that of covers with long waiting periods. "Pricing has to be higher because the risk is also higher for the pool of customers in such a policy," says Bathwal. He adds that the amount by which the premium is higher depends on the number of PEDs a customer has. If he has only one, it could be 10-15 per cent higher; if he has more ailments, it could be 20-25 per cent higher, and so on.

Such policies may, however, come with a low sum insured. "To manage its risks, the insurer could limit the sum insured to, say, Rs 5 lakh," says Mehta.

The customer may have to undergo a series of medical tests. "There will be no automatic underwriting in such products," says Indraneel Chatterjee, co-founder and principal officer, Renewbuy.com.

What should you do?

If your pre-existing condition is mild, Mehta suggests trying to buy a regular policy first. "An insurer with a large customer base may offer you a regular policy despite a PED. You will get a higher sum insured there," he says. This is assuming you can wait for some time for the coverage to kick in. Policies with waiting periods of 90 days or 12 months are also available. If you fail to buy a regular policy, then try to buy one of these.

Disclose all pre-existing conditions. "Make complete and accurate declarations about your medical condition to reduce the probability of claim being rejected," says Mehta.

Prakash says customers must make sure the product has no sub-limits.

Do not purchase based on cost comparison alone. "Sometimes, the product with the higher premium may offer greater peace of mind because it offers wider coverage," says Chatterjee. Finally, understand the stage of the disease for which day one coverage will be offered.