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A crucial point anyone purchasing health insurance must heed is the need to declare PEDs.
The Insurance Regulatory and Development Authority of India (Irdai) recently issued the Irdai (Insurance Products) Regulations, 2024.
This notification introduces several customer-friendly measures, including reducing the maximum waiting period for pre-existing diseases (PEDs), a shorter duration for conditions to qualify as PEDs, and a decreased moratorium period.
Waiting period for PEDs reduced
When a customer attempts to purchase health insurance, the insurer enquires about all existing illnesses.
If the declared condition qualifies as a PED, the customer must wait for a specified period before receiving coverage for it.
If the customer falls ill during the waiting period, they must bear the medical expenses.
Previously, in most policies, the waiting period for PEDs ranged from 12 to 48 months. However, the regulator has now mandated that the maximum waiting period for PEDs cannot exceed 36 months (provided there is no break in coverage during this period).
Experts say this is a welcome development. Reducing the waiting period by one year will positively impact insurance penetration, as more individuals with PEDs will gravitate towards purchasing health plans, says Naval Goel, CEO, PolicyX.
Siddharth Singhal, business head-health insurance, Policybazaar.com, adds that this step will boost insurance penetration in the country.
Claim rejections may decline. One of the primary reasons for claim rejections is pre-existing conditions.
With the lowered PED waiting period, fewer claims will be rejected and more will be settled, benefiting patients, says Kapil Mehta, co-founder, SecureNow.
PED qualification period modified
Earlier, a PED was a health condition diagnosed or treated within the past 48 months prior to the policy s commencement. This period has now been brought down to 36 months.
Older health issues that occurred in the fourth year or earlier will no longer be pertinent. The number of past ailments that can be classified as PEDs will decline, resulting in a greater number of claims being paid, says Mehta.
Goel says this will reduce the number of disputes between the insurer and the insured.
Specific waiting period to be 36 months
According to the regulator, specific waiting period refers to a period up to 36 months from the commencement of a health insurance policy during which specified diseases or treatments (except due to an accident) are not covered.
Specified diseases refer to ailments like cataract or planned procedures like joint replacement, kidney stone removal, among others, whose treatment can be deferred.
Competition paring waiting period
About a decade ago, the average waiting period in health insurance policies (say, for a large set of policies) tended to be close to four years. Over time, the waiting period has decreased.
Driven by competition, insurers now offer plans that allow customers to reduce the waiting period from three-four years to just one day.
Many plans covering conditions like diabetes, hypertension, asthma, cholesterol, among others exist where customers can receive coverage from day one by paying a 10-15 per cent higher premium, says Singhal.
He recommends paying the extra premium for day one coverage, considering the added value this feature provides.
Points to heed
A crucial point anyone purchasing health insurance must heed is the need to declare PEDs.
Consider an example: a person manages to control hypertension with a small dose of medication. Often, people fail to disclose such conditions because they may not appear in tests.
This is a big mistake. You must disclose both the condition and the medication you take for it. This will then be recorded in the policy document, reducing the likelihood of disputes at the time of claim settlement, says Mehta.
One reason people fail to declare PEDs is the fear that their proposals will be rejected.
The reality is that insurers are becoming comfortable underwriting individuals with chronic ailments, including thyroid issues, cholesterol, hypertension, and in some cases, even heart diseases.
Therefore, it is better to declare honestly, adds Mehta.
Feature Presentation: Ashish Narsale/Rediff.com
