Why disclosing pre-existing diseases to your health insurers pays

It helps the insurer to understand the nature of risk it is taking and minimises the possibility of claim rejection

Incorrect disclosure is the chief reason for repudiation of health insurance claims. A complete disclosure of pre-existing diseases and your family's history of ailments is essential at the time of buying a policy as it enables the insurer to understand the nature of risk it is undertaking, and hence arrive at the correct premium. If knowingly or unknowingly, you don't make correct disclosures, you could be denied a claim in your hour of need. 

According to Jyoti Punja, chief customer officer, Cigna TTK Health Insurance, "If the policyholder makes the disclosures upfront during the process of underwriting, there won't be any conflict and no questions will be raised in the future on the grounds of non-disclosure." 

If a person above 45 is buying a new policy, he will be made to undergo medical tests. If those tests don't reveal anything, he will get the policy. But if the tests reveal that he suffers from certain conditions, any of the following could happen. One, the insurer may offer a cover if it thinks that the risk is acceptable, but with a loading, which means that the person may be charged a higher premium than a healthy person. Two, he may be covered for pre-existing disease, but after a waiting period of three or four years. Three, the insurer could reject the proposal. 

Let us turn to the case of a person below 45, who does not have to undergo a test. He may have a condition, such as hypertension, but chooses not to reveal it. If two years later, he suffers from a cardiac ailment, which is related to hypertension, his claim could be denied. The pre-existence of such conditions gets revealed in a variety of ways. "Most people reveal their case history truthfully to their doctor. The doctor may write on his prescription that the person has been hypertensive for the past four years. Insurers have access to a patient's medical records," says Rahul Mohata, chief operating officer, 121policy.com. 

Most diseases do not reach an acute stage suddenly. A diabetic is likely to have a mild form of it for which he will initially take oral medicines, and only later graduate to insulin injections. Suppose that a person buys a policy at 35, does not reveal his blood sugar problem, and then makes a claim at 37. When a claim arises soon after purchase, insurers turn suspicious. In such cases, the onus of proving that the disease happened after the person took the policy is on the insured. "The insurer will demand proof that the condition developed after buying the policy. The patient could be asked to submit his doctor's prescription, or medical reports from the time when he was first diagnosed with blood sugar," says Mohata. 

Sometimes, a person may be disease-free at the time of buying the policy, but may develop a condition after three or four years. Should he disclose this condition to the insurer? "Insurers typically ask for more disclosure only if you apply for higher coverage. Otherwise, renewal is on the as-is basis. They don't ask for additional information about your health at the time of renewal," says Prawal Kalita, director-benefit solutions, JLT Independent Insurance Brokers. 

Experts, however, say that it is a good practice to reveal major changes. Says Vaidyanathan Ramani, head of product and innovation, PolicyBazaar.com: "As a good practice, policyholders should disclose if there are any changes in their health conditions as their insurer can guide and help them with their conditions.” Many health insurers provide complimentary expert advice and wellness programmes to customers to help them recover. The policyholder's premium will not be affected on account of revealing. Premium is hiked only with age, or if the policyholder wants to increase his sum insured. The same principles apply for lifestyle changes like smoking. 

Do's and don'ts for insured

• If you are less than 45, you won't have to undergo medical tests. Nonetheless, reveal all pre-existing diseases
• If a claim arises soon after buying the policy, insurers turn suspicious
• If a new condition develops after buying a policy, it is not essential to reveal this to the insurer, but it is better to do so
• Changes in lifestyle that could impact your health should also be voluntarily revealed