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IRDAI amends definition of pre-existing diseases, a move that can reduce insurance claim rejection


The insurance regulator has amended the definition of pre-existing diseases, a move which could lead to a reduction in the claim rejection rates in health insurance. The Insurance Regulatory and Development Authority of India (IRDAI), through a circular dated February 10, 2020, has deleted ‘the additional/modified clause’ in its current definition of pre-existing diseases.

Last year in September, the regulator had modified the definition of pre-existing diseases (PEDs) to include certain illnesses if diagnosed within three months after purchasing the health insurance policy. This definition was included in the guidelines on standardisation in health insurance released by IRDAI on September 27, 2019.

However, through its circular issued today, the regulator has now deleted this clause. Thus, as per the new definition, no such disease will be treated as PED even if diagnosed within three months, or later, after buying the health insurance policy.

Naval Goel, CEO, PolicyX.com said, “This is a welcome move for policyholders. Sometimes an insured may develop a condition within 3 months of buying a policy. Insurers earlier could reject such claims in policies in certain cases where they deemed the condition to be defined as a PED. Now, the definition of PED is absolutely clear reducing any ambiguity. This move will definitely reduce the claim rejection rates in health insurance.”

Also read: Certain illnesses in 1st 3 months of health insurance policy to be treated as pre-existing disease

All insurers and third-party administrators (TPAs), wherever applicable, are advised to make changes and ensure compliance with immediate effect, IRDAI stated in its circular.

As per IRDAI, the change in the Definition of Pre-Existing Disease (not applicable for Overseas Travel insurance) is mentioned below

Existing New
Pre-existing Disease means any condition, ailment, injury or disease: Pre-existing Disease means any condition, ailment, injury or disease:
a) That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or a) That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or
b) For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy or its reinstatement b) For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy or its reinstatement
c) A condition for which any symptoms and or signs if presented and have resulted within three months of the issuance of the Policy in a diagnostic illness or
medical condition.
Deleted
(Life insurers may define
norms for applicability of
PED at Reinstatement)
(Life insurers may define
norms for applicability of
PED at Reinstatement)

Source: IRDAI

What is a pre-existing disease?
A pre-existing disease is a condition, ailment or injury that already exists at the time you buy a health insurance policy and these PEDs are generally excluded from the policy coverage for an initial waiting period. The maximum waiting period on such PEDs is four years.





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