In order to check malpractices and offer uniformity in the text of health insurance policies, General Insurance Council (GIC), a statutory body of all non-life insurers, has come out with a uniform definition on pre-existing diseases. Also, all policies issued from 1 June will cover pre-existing disease from the fifth year of the policy.
“We have issued an advisory notice to all insurers suggesting they apply the same definition to existing policies. But, it is at their discretion to adopt the definition. However, for fresh policies, the entire market will adopt the standard definition,” says K.N. Bhandari, secretary general, GIC.
By the new standard definition, pre-existing exclusion means “the benefits (of health insurance) would not be available for any condition, ailment or injury or related condition for which the insured had signs or symptoms, and/or was diagnosed and/or received medical advice/treatment, prior to inception of the first policy, until 48 consecutive months of coverage have elapsed, after the date of inception of the first policy.”
What this means is that for a fresh policy, no pre-existing disease will be covered for four years. After these four years of continuous coverage and no claims on account of the ailment in question, the pre-existing disease will be included under the cover. Says C. Chandrasekhar, chief marketing officer, Apollo DKV Insurance Co. Ltd, a stand-alone health insurance company: “Insurance covers risk and not certainty. So, if a person has a pre-existing ailment, an insurer needs some time before he can safely take on the risk.”
Earlier, the definition of what was a pre-existing disease as well as the coverage for it was at the insurance company’s discretion.
As of now, health insurance policies by life insurers will not have to adopt this practice. GIC, however, is considering making it a general definition for all. Says Bhandari: “We have submitted the recommendation to the insurance regulator and the decision rests with it to make it mandatory for the life insurance companies as well.”