New health covers factor in pre-existing illness

INSURANCE TIME: 75% of disputed claims in mediclaim policies are because of lack of clarity.

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Mumbai: If you have not shown symptoms of a particular disease for four years before buying a mediclaim policy, it may no longer be considered a pre-existing illness.

Fed up of medical claims being rejected by insurance companies? There is finally some help at hand. Insurance regulator IRDA had asked the general insurance council for a clear definition and sources say this has been finalised.

The council says that if a consumer has not been diagnosed with or has not shown symptoms of a disease or has not received medical advice for it for four years before buying a mediclaim policy, it will not be considered a pre-existing illness.

seventy-five percent of disputed claims in mediclaim policies are because of lack of clarity

Experts say of the definition of pre-existing ailments.

General Insurance Council Secretary General KN Bhandari says, “There're lot of disputes due to pre existing illnesses, we're working on a common definition to remove these."

Insurance companies have their own definitions of pre-existing illnesses.

Most of them include illnesses suffered by a policy holder before taking insurance and hence exclude them from cover.

Now, pre-existing illnesses are covered only if a policy holder does not claim for four years.

The general insurance council will submit the proposed definition to the insurance regulator on Thursday.

Industry sources say the new definition might lead to a higher claim ratio and so, a higher premium. But this clarity would benefit policyholders most.