Applying for Life Insurance with a History of Illness

There is a reason for this of course. A life insurance policy, at the end of the day is an investment, and insurers need to assess the viability and risk of signing off on high-payout policies. So what does this mean for individuals who have a history of long-term illnesses or pre-existing medical conditions?

What is a Pre-existing Medical Condition?

As per the Insurance Regulatory and Development Authority’s 2013 guidelines, all Indian health insurance providers have to follow a common set of definitions relating to health insurance terminology. According to them a pre-existing medical condition is an injury or a related condition for which symptoms have been present for some time and for which medical advice, treatment or diagnosis was sought 48 months prior to the issuance of the first policy.

Significance of Pre-existing Medical Conditions

Pre-existing medical conditions have a significant impact on the application of a life insurance policy. It is required that a full disclosure be made regarding an individual’s medical history at the time of the application. Quite obviously, the presence of pervasive health conditions will drive up insurance premium. This is a catch-22 situation where being upfront will result in a more expensive policy for the person looking to get insured. However, holding back or suppressing facts is simply not an option, because if the facts do not match with the information provided during the time of application, it could result in a complete rejection of the claim later on due to non-disclosure of material facts.

Therefore when filling out a life insurance proposal, t is critical to gain a thorough understanding of the terms and conditions with respect to a person’s existing health scenario. It is also important to look at how this will affect coverage of the policy and any related riders.

The following factors should be kept in mind when someone with a prior medical history applies for a life insurance policy:

• Compare policies from different insurers
• Buy life insurance as early as possible. Good health is not a given - deteriorating health will lead to expensive premiums
• Full disclosure of all pre-existing condition in the proposal form is not an option. Do not conceal any material facts. In fact if the policy mandates a full health check up, it is advisable to undertake it. If cost becomes a deterrent it should be borne in mind that polices that do not require a health check up will charge higher premiums in any case.