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Does group insurance cover pre-existing diseases?

A pre-existing disease or PED refers to the medical condition that a person already suffers from before the policy purchase. These may include diabetes, hypertension, asthma, among others. (iStockphoto)Premium
A pre-existing disease or PED refers to the medical condition that a person already suffers from before the policy purchase. These may include diabetes, hypertension, asthma, among others. (iStockphoto)

  • Group health insurance policies cover pre-existing diseases or PEDs since, in this case, a company is buying the policy and not an individual; there is a lower risk of fraud, so PEDs are included

NEW DELHI: Most health insurance policies do not cover any pre-existing diseases (PEDs). However, when buying a new health policy, it is vital to understand whether group health policies cover PEDs.

Generally, if policy buyers have PEDs, they are required to undergo several procedures. PEDs entail higher financial risk for insurers. So, insurers may not cover these diseases in the initial years when buying a health policy. Therefore, it helps, if you look at particular health policies covering PED in health insurance.

A pre-existing disease or PED refers to the medical condition that a person already suffers from before the policy purchase. These may include diabetes, hypertension, asthma, among others. The exclusion of these PEDs is a matter of concern for those who are looking for comprehensive health insurance cover from day one.

Retail health policies don't cover PEDs

Mayank Kale, CEO, and co-founder of Loop Health said, "Historically, insurance companies have seen a lot of fraud in retail policies, so they have tightened up what is covered. There's an adverse selection problem with buyers. This means that they don't cover PEDs for 3-4 years when individuals buy retail policies."

However, group health insurance policies cover PEDs since, in this case, a company is buying the policy and not an individual; there is a lower risk of fraud, so PEDs are included. And, companies have been demanding more coverage in their health benefits.

Indraneel Chatterjee, RenewBuy said that group insurance policies cover PEDs. Majority of companies that provide health insurance policies include this coverage as part of their standard health policy. The employee, their spouse, dependent parents, and dependent children up to a certain age can all avail benefits of PED in group insurance plans. Group insurance premium depends on five factors—group size, employee age factor, parents' cover, maternity cover, and PED cover from day one.

"The terms and conditions, inclusions as well as exclusions are same for every individual covered by the policy. There is no need to declare pre-existing conditions and no waiting period in case of group health cover if the company chooses the option while paying the premium," said Chatterjee.

Is PED coverage enough?

Group health cover offered by employers is a perquisite that the employer can discontinue at any time. Further, the health coverage is linked to your job or service tenure. Once you quit the job, the policy gets terminated. Moreover, unlike retail health policies, a group policy cannot be extended or renewed further. Hence, one should look at PED coverage, and other terms and conditions need to be evaluated while calculating one's health insurance need. Ideally, it would be paramount to go for additional coverage that can effectively plug the gaps in the group health policy without unnecessary duplication of coverage.

"You should not completely rely on group health policy. HRs are asking for more comprehensive benefits, including OPD, paediatrics, maternity, mental health counselling, and other services. These are not covered by default in group policies and can be expensive! However, the pandemic has driven companies to provide better health benefits that people can really use," says Kale.

ABOUT THE AUTHOR

Navneet Dubey

Navneet Dubey is a personal finance writer and artist. Over the past decade, he has written feature stories on insurance, financial planning, lending and borrowing.
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