While life insurance is a must-have for all Indian residents, the process of filling in a life insurance application can often seem like an invasive procedure.
Details about one’s life that are intensely private medical histories of you and your family come to public light. Moreover, life insurance premiums are dependent on riders such as health and lifestyle.
There is a reason for this of course. A life insurance policy, at the end of the day is an investment, and insurers need to assess the viability and risk of signing off on high-payout policies.
So what does this mean for individuals who have a history of long-term illnesses or pre-existing medical conditions?
What is a Pre-existing Medical Condition?
As per the Insurance Regulatory and Development Authority’s 2013 guidelines, all Indian health insurance providers have to follow a common setof definitions relating to health insurance terminology.
According to them a pre-existing medical condition is an injury or a related condition for which symptoms have been present for some time and for which medical advice, treatment or diagnosis was sought 48 months prior to the issuance of the first policy.
Significance of Pre-existing Medical Conditions
Pre-existing medical conditions have a significant impact on the application of a life insurance policy.
It is required that a full disclosure be made regarding an individual’s medical history at the time of the application.
Quite obviously, the presence of pervasive health conditions will drive up insurance premium. This is a catch-22 situation where being upfront will result in a more expensive policy for the person looking to get insured.
However, holding back or suppressing facts is simply not an option, because if the facts do not match with the information provided during the time of application, it could result in a complete rejection of the claim later on due to non-disclosure of material facts.
Therefore when filling out a life insurance proposal, t is critical to gain a thorough understanding of the terms and conditions with respect to a person’s existing health scenario. It is also important to look at how this will affect coverage of the policy and any related riders.
The following factors should be kept in mind when someone with a prior medical history applies for a life insurance policy:
- Compare policies from different insurers
- Buy life insurance as early as possible. Good health is not a given – deteriorating health will lead to expensive premiums
- Full disclosure of all pre-existing condition in the proposal form is not an option. Do not conceal any material facts. In fact if the policy mandates a full health check up, it is advisable to undertake it. If cost becomes a deterrent it should be borne in mind that polices that do not require a health check up will charge higher premiums in any case.
Alternative Models: Life + Health Insurance
In this day and age, long standing health conditions are becoming the norm. Increasingly, younger demographics and age brackets are seeking medical attention for wide ranging medical reasons that could vary from diabetes to special needs.
As a result this has led to an exponential increase in the demand for adequate health insurance in recent times.
Consequently, life insurance providers are finding more and more that critical care and medical insurance can bolster and complement the offerings of a life insurance policy.
The trends have revealed that the Indian insurance market is gravitating towards the global model where life and health insurance are available as one holistic platform and providers have been responsive as well. For instance, LIC has diversified into providing health insurance coverage, Edelweiss launched its Criticare + plan, and so on.
This is beneficial to those who would previously have their existing medical conditions covered by provisional riders in their life insurance policy.
Because if their health conditions deem their premium more expensive, at least a comprehensive health insurance package will provide relief in times of medical need