Imagine this scenario: A 44 year-old professional with a 10-hours-a-day work schedule is quite fit, but understands that this might not always be the case. A little research reveals that many health insurance providers ask for a mandatory medical test for buyers above the age of 40.
As he has no symptoms, and can hardly spare the time, he buys a policy which says “No Medical Test Required”. 2 years down the line when he is hospitalized, the doctor reveals that he has suffered a diabetic shock. But his insurance provider denies the claim: saying it was a pre-existing condition which was not declared at the time of purchase of policy. The bill for the just the first two days comes out to a little over Rs.30,000, which he must now pay from his own pocket.
Through no fault of his own, the policy holder may find his claim denied because he was unaware of a disease that may or may not be the cause of expense after the policy was taken out. If a buyer goes through a medical test, the responsibility of determining his health condition shifts to the health insurance company. If they fail to identify a condition at the time of purchase, they cannot claim it as a pre-existing cause.
These plans are not as customer-friendly as they appear. The exemption is made not for the buyer’s convenience, but as a selling-point in order to persuade the confident and fit buyer who might consider a medical exam as either an inconvenience or an invasion of privacy.
Either way, the risk resulting from this exemption is usually built into the premium the policy holder has to pay. Also, as insurers will cover the risk anticipated, while the marginally ill policy holder pays as much premium as a healthy one, he might have to pay as much as a significantly ill one.
If a policy holder is aware of his condition but has not declared it at the time of purchase, it is likely that at the time of a claim the truth will be uncovered and the insurer will not entertain it. In fact, such a scenario leads to significant loss on your part and profit on the part of the insurance provider.
Insurers agree the claims rejection rate for policies without medical tests is high. “In many cases, such policies are bought after an individual has been diagnosed with a disease,” says Rajeev Kumar, chief and appointed actuary at Bharti AXA Life Insurance.
Many health insurance providers offer plans which do not involve any medical tests if the person is aged below 45 years of age. A simple declaration of good health while purchasing the health plan is enough and policies are issued based on such declarations (the assumption being latent medical conditions rarely manifest at this age).
Common ailments like hypertension, diabetes, blood pressure, etc. either begin to set in or if already present they tend to get severe in our late 40s. However, there are Health Insurance Companies in India who have developed plans which do not call for any medicals till the age of 50 years or even 65 years.
Should we opt for a statutory medical test before taking out a health insurance policy?
For those who are healthy, the savings can be substantial in the long run as the premium with a medical test for a fit person will always be lower than without, because now he poses a significantly lower risk.
If you take the medical exam first and find out something is amiss with your health, the record will be preserved as per Indian Evidence Act, 1872 and made available to future insurance providers.
“Though the information made available from the hospital medical record is a privileged communication and the document in this respect is used as a personal document, yet the release of such information without the prior consent of the patient is permissible because the patient had waived his claim of this privilege at the time of taking out a policy with the corporation.”
In the end, your choice will depend on two factors—age and state of health. The purpose of health insurance is to help us at a time of crisis. But unless we are honest about our physical condition both to the insurance provider and ourselves, the money is likely to come directly out of our pockets.
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