IRDAI Modifies Pre-Existing Disease Definition For Health Insurance Policies

In a welcome move for policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) has changed its definition of pre-existing diseases (PEDs) in health insurance. The regulator has deleted the clause that defined PEDs to include certain illnesses if diagnosed within three months after the purchase of health insurance.

Last year in September, IRDAI had included the clause in its guidelines on health insurance. "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," it said.

In its latest circular issued on 10 February, the clause has been deleted.

A pre-existing disease is a condition or symptom that already exists in a person at the time of purchase of a health insurance policy. These affect the premium paid and are also excluded from the policy coverage for the initial waiting period.

As per IRDAI's definition, a pre-existing disease includes "any condition, ailment, injury or disease" 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."

The deletion will help policyholders who develop symptoms of diseases within the initial months of purchase of insurance and will be able to treat it faster as the claim rejection rate will reduce.

"Insurers and Third Party Administrators, wherever applicable, are advised to make a note of the changes and ensure compliance," the IRDAI said.