Insurers can exclude some pre-existing illnesses permanently, per IRDAI panel
Exclusion of some pre- existing illnesses permanently
Insurance companies in India could be allowed to exclude permanently from coverage some pre-existing illnesses, said an IRDAI working group.
The committee also said that insurers could set a four-year waiting period for pre-existing conditions for certain ailments,longer than the current waiting period of up to two years for most illnesses.
The extension of the waiting period is part of recommendations that aim to make insurance terms more customer friendly. Insurers are also asked to be more transparent about what illnesses they cover.
In its report on standardisation of exclusions, the working group said exclusion of diseases contracted after taking a health insurance policy such as Alzheimer’s, Parkinson’s, HIV/AIDS and morbid obesity cannot be permitted. However, they can have a waiting period of four years.
The group has also recommended 17 pre-existing illnesses which could be permanently excluded. These exclusions include epilepsy, stroke, chronic liver diseases, chronic kidney diseases and Hepatitis B. On the list are Alzheimer’s and Parkinson’s disease which will not be covered if they are pre-existing conditions.
If the undisclosed condition is other than those mentioned on the list of permanent exclusions, then the insurer can incorporate an additional waiting period for a maximum period of four years from the date of detection.
The recommendation, however, states that these exclusions can be reviewed on a yearly basis.
The working group has recommended a moratorium period of eight years of continuous renewals after which the claim cannot be questioned based on non-disclosure or misrepresentation at the time of buying the policy.
This would mean the policy would be uncontestable in terms of application of any exclusions, except for proven fraud as well as permanent exclusions specified in a policy contract.
According to the working group, all health conditions acquired after the policy inception should be covered by insurers.