It was when Neeraj Purandare tried to bump up his medical cover that he hit the “pre-existing” wall. Purandare had just undergone a heart surgery and at just 42, got the fright of his life.
That’s when the ignored Rs1 lakh policy suddenly looked like a lifeline. One of the first calls he made from his post-operation hospital bed was to his agent. Purandare wanted to bump up his cover and that of his family to Rs5 lakh. The distance between a “want” and real life became obvious as not only was the bump-up denied, his existing policy became significantly more expensive to maintain.
With lifestyle-related diseases (hypertension, diabetes, heart problems) hitting one in every 10 urban Indians, and the cost of private sector medical care resembling a five-star hotel bill, effective medical insurance becomes important. Let’s talk about how to negotiate insurance company rules if you get diagnosed with a serious ailment like Purandare did.
If you don’t have a cover
Not having a cover means you have just dipped into your savings and paid up the hospital bill and now realize that you need health insurance.
It wouldn’t be easy at this juncture simply because we are dealing with “insurance”, which, in essence, is against unplanned events such as an accident or a disease that you are not yet suffering from. Insuring you, who has already been diagnosed with a disease, would mean that the insurer is increasing his probability of paying the claim. Simply put, he would be making losses on his business and that is the reason why even the insurance regulator, Insurance Regulatory and Development Authority (Irda), allows companies to refuse customers a cover if they are found “unfit”.
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Till the time the insurance market was a virtual monopoly, outright refusals were common, but privatization has changed this. With 15 of the 19 insurers being private players and two companies catering exclusively to the health insurance business, the chances of getting a cover, despite having a pre-existing disease, are much higher now. So, don’t give up if you hear a “no” from one insurer.
Antony Jacob, CEO, Apollo DKV Health Insurance, says: “In our case, someone who has, say, hypertension can obtain cover by paying additional premium. Someone with terminal cancer would be uninsurable. To ensure that healthy individuals do not overly cross-subsidize unhealthy individuals, care is exercised in allowing members with pre-existing conditions into the risk pool.”
So, you can get a cover, but at a higher premium. Remember, a fresh cover will not cover your existing disease (diabetes, hypertension or whatever else) and any complication arising out of it (for example, hypertension can lead to a stroke) for four years. From the fifth year, the pre-existing clause is waived off and your policy will start covering these ailments as well.
C. Balaji Kaddapa, vice-president, Bharti AXA General Insurance Co. Ltd, says, “Since we can exclude covering pre-existing diseases for a maximum of 48 months, we need to load the policies so as to recover costs for the higher risk we take from the fifth year.”
If you have a cover
The rulebook says that you cannot be refused a policy renewal. Deepak Mendiratta, managing director, Health and Insurance Integrated, says: “As per the norms, an insurer cannot deny an insured person a renewal, however adverse the situation may be. At most, the insurer can charge extra premium at the time of renewal.”
But real life is different. Having a health insurance policy is not enough. Like Purandare, you will still have to sweat it out if you want to top up your cover. The insurer will apply the same scanner that is used when issuing a new cover to give you the extra bit. So, be prepare for either an outright refusal or shelling out extra. Sreeraj Deshpande, head, Bajaj Allianz General Insurance Co. Ltd, says, “If an insured person is looking to increase his cover, he will have to face a waiting period of four years for any pre-existing diseases for the extra sum insured.”
You can get a pre-existing ailment covered without a waiting period clause only under a group health insurance scheme, the one offered by your employer. Most group policies include pre-existing diseases. Says Jacob: “When there is a guaranteed size of risk pool with a mix of healthy and sick people, it is possible to cover pre-existing conditions. That’s what happens with group insurance.”
But, this too has a caveat. Do not depend on your group insurance alone. You never know when you may hop jobs and whether your new employer will give you a similar cover. Most importantly, when you go out in the market shopping for an individual cover, you will hit the pre-existing wall once again. And that is usually around the time you retire. At 60, given urban lifestyles, the chances of getting a lifestyle disease are much higher.
The only advice Money Matters has on this: buy a health insurance policy as early in your life as you can and keep increasing the sum insured while you are healthy. If you get caught unprotected, shop aggressively for a policy. You may have to pay more, but chances are that you will get a cover.
Graphics by Ahmed Raza Khan / Mint