One of the favourite clauses of insurance companies is that of exclusion with respect to pre-existing diseases, as it is used to reject the maximum number of claims. By wrongly interpreting the clause, insurers not only reject claims with respect to pre-existing diseases, they extend it to other diseases, too. For instance, thanks to the stressful lives we lead, most people suffer from hypertension, which is not a major ailment and can be easily controlled by medication. Yet, if the insured makes a claim for heart problem years later, the claim is rejected on the grounds that hypertension was pre-existing. Such a rejection is neither legal nor justified.
The General Insurance Council of India (GIC) is a statutory body under the Insurance Act. Both public and private sector general insurance companies come under its purview. Thanks to the havoc played by the wrongful interpretation of the term “pre-existing disease”, GIC felt it necessary to have a uniform definition which would be applicable to all medical insurance policies (new as well as renewed) after June 1, 2008.
It says:
Definition of a pre-existing disease: Any condition, ailment, injury or related condition(s) for which you had signs or symptoms, and/or were diagnosed, and/or received medical advice/treatment, within 48 months before taking your first policy with us.
Exclusion wording: Benefits will not be available for any condition(s) defined in the policy, till 48 months of continuous coverage have elapsed, since inception of the first policy with us.
Vasant Rao took a mediclaim policy from New India Assurance, effective from March 1, 1995. The policy was subsequently renewed year after year. In February 1999, Rao complained of chest pain and was hospitalised. The angiography test detected he was suffering from ischemic heart disease. Later, he underwent a coronary artery bypass graft surgery.
He lodged two claims for the reimbursement of medical expenses. Based on the disclosure in the proposal form that Rao had undergone a bypass surgery in 1986, the insurance company rejected the claims under the pre-existing clause.
Rao challenged the rejection before the district forum, which held the repudiations as unjustified and constituting a deficiency in service. The insurance company’s appeals to the Karnataka State Commission were dismissed. The matter went to the National Commission.
The insurance firm argued that in view of there being no dispute about Rao having undergone a bypass surgery in 1986, well before taking the policy for the first time in 1995, the claims were properly rejected under the clause providing for exclusion with respect to diseases/injuries existing when the cover incepts for the first time. The commission noted that after having undergone a bypass surgery in 1986, Rao was on medication for only three months. He took the policy 10 years later, and, during this period, he did not suffer from any heart problem and was in active police service till retirement. Merely because a heart problem occurred again four years after having taken the policy, it could not lead to the inference the disease was continuing after the successful bypass surgery. Hence, the commission held the repudiations as unjustified. Accordingly, both revision petitions of the insurance company were dismissed, with costs of Rs 10,000 payable to Rao in each case.
It is unfortunate that insurance companies still continue to suppress or mislead the public and the courts about the uniform definition prescribed by GIC, making all sorts of excuses to justify the rejection of claims under the garb of pre-existing disease.
(The author is a consumer activist)
