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Waiting Period: A Necessary Clause to Consider in Health Insurance

 Health emergencies do not come with prior notice. A simple medical treatment to treat an illness that involves pre-hospitalization expenses, in-patient hospitalization expenses, and post-hospitalization expenses can drain all your savings. Therefore, buying a medical health insurance policy is no more an afterthought – but a bare necessity.

While selecting the best health insurance in India, people do take into consideration product features, inclusions, exclusions and premium. However, there is one aspect that few pay attention to – which is the waiting period.

During this period, the insured cannot lodge a claim. The coverage under the insurance policy only commences after the waiting period. Waiting period rules differ from one insurer to another insurer.

Types of waiting periods in Health Insurance

The different types of the waiting periods in medical insurance policies are given below:

Initial Waiting Period

Most insurers have an initial waiting period after a health insurance has been purchased. The duration of this waiting period is between 30 and 90 days. A claim can be made only after this period. In some insurance policies, the waiting period commences right from the first day.

No medical expenses for the treatment of illnesses can be claimed within this period unless a mishap or accident has happened that requires hospitalization.

Waiting Period for Specific Diseases

Waiting periods differ based on specific diseases. Congenital disorders may have different waiting periods than lifestyle-induced diseases. Disease-specific waiting durations differ by insurer. And even within the insurer, these waiting periods differ from one health insurance plan to another.

Waiting Period for Pre-existing Diseases

The insured must inform the insurer about existing medical conditions before taking an insurance policy. Instead of running the risk of getting their claims rejected, applicants should inform the health insurance company about pre-existing health conditions, so that the insurers can grant a waiting period for such pre-existing medical illnesses. For PED the waiting period can range from 1 year to 4 years.

Waiting Period for Maternity Cover

Most health insurance plans cover maternity expenses after the completion of the given waiting-period. For some plans that do, there is a waiting period ranging from 9 months to 36 months. Therefore, it is advisable for those planning a family to take a health insurance plan with maternity benefit much ahead of time.

If purchased timely maternity benefit can be utilized for pre and post-natal expenses. Some health insurance providers go the extra mile by providing newborn baby expense coverage as well.

Why Waiting Periods? What is its Significance?

The waiting period is a guard of any best health insurance plan in India. It exists to safeguard insurance companies. If there was no waiting period, then someone with an existing medical condition can purchase an insurance policy, and make a claim the next day. If such an act is done by thousands of people, the insurance company will have to file for bankruptcy.

Insurance companies generate income from the premiums paid by policyholders. Some policyholders make insurance claims; some don't. This way, insurance companies can manage cash flow and stay in profit because of the balance that exists between claimed amounts and unclaimed amounts.

Change in Definition of Pre-existing Diseases

The Insurance Regulatory and Development Authority (IRDAI) has redefined Pre-existing Diseases (PED). As per the definition, if the insured is diagnosed with a medical condition within three months of the policy issuance, then this ailment will be deemed as PED if the insured discloses the same to the insurer. Before this definition, the incumbent definition of PED was that if any medical condition was diagnosed within four years before the issuance of the policy, then this ailment is classified as a PED.

In this regard, IRDAI has laid down the following rules:

  • A PED is one that was diagnosed four years before the start of the policy, where the PED was diagnosed by a qualified physician. The physician prescribed medical advice in the form of treatment, prescriptions, medicines, etc.
  • A PED is also one that is diagnosed with three months of the issuance of the health insurance policy effective date
  • If the insured hides information about PED to the health insuranceprovider and continues to do so even within three months of the policy effective date, and if the insurer knows about it, they can reject any claim made.
  • The insurer has the power to do this only for up to 8 years. After eight years of post-policy issuance, the insurer cannot reject a claim by the insured, even if the PED has been undisclosed.

It is expected of the insured to disclose all information about their medical health conditions. This ethical act is expected even when porting one health insurance to another.

Common Reasons Why Insurers Reject Claims

When purchasing a health insurance plan, incorrect or incomplete information in the claim form can be a potential reason for a claim rejection in future. There have been many cases where insurance companies have rejected health insurance claims because the insurance policyholder did not validate their entries. So, make sure that fill it correctly and furnish all the relevant information.

Always provide names as per government-approved personal identification documents. If the first name and last name of a person has no abbreviations on a government identification document of this person, then this correct exact name has to be provided. Providing abbreviations, in this case, can cause an issue during the time of claim.

Mentioned below are some of the other reasons why an insurance claim can get rejected:

Hiding Pre-existing Diseases, Medical Information, and Family Details

In the policy form, there are sections dedicated to medical history, family history, and lifestyle. Misrepresenting or hiding this information, such as not disclosing smoking or drinking habit, is treated as misappropriating information.

Sometimes insurance holders hide smoking or drinking lifestyle habits to pay a lower premium. But at a later stage, if the claims department finds that this person had a chronic smoking or drinking habit, then their claim is rejected outright.

Delay in Filing a Claim

It is essential to read the terms and conditions of the health insurance plan to understand the period within which a claim has to be made after hospitalization, pre-hospitalization, post-hospitalization treatments. Even a day's delay in claiming insurance can get the claim rejected. This period varies and is dependent on the insurer and the insurance policy.

Lapse in Policy

Health insurance plans that are in-force are considered for claims. Policies are kept in-force by paying policy premiums on time. A lapsed policy due to non-payment of premiums will not be considered by the insurance company. Even if the payment of the premium has been missed, it can be paid within the grace period.

To Conclude

Taking the best health insurance plan in India is a significant investment for individuals and their families. Insurance penetration is still booming in India, so new policyholders can expect to get attractive schemes from insurance companies, especially amid the ongoing pandemic.

Written By: Paisawiki - Updated: 23 October 2020

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