Health insurance application declined? Here’s what you need to know | Personal Finance

Health insurance application declined? Here’s what you need to know | Personal Finance

Health insurance application declined? Here’s what you need to know | Personal Finance

Notwithstanding the growth in health premiums, insurers have seen elevated levels of Covid claims in the first three months of the financial year due to the second wave of the pandemic.

Kavita, a 34-year-old Pune resident, recently underwent a myotomy laparoscopy. Realising the importance of health insurance after her surgery, she applied to several insurers. However, her applications were rejected. The insurers told her that they would not accept an individual who has had a major surgery.


Have you been denied a policy on similar grounds?


What can you do if you find yourself in a similar situation? Let’s understand the details.


Why do insurers reject applications after surgery?


“The insurance companies take a decision to provide coverage based on the risk assessment of an individual’s medical condition,” says Siddharth Singhal, Head of Health Insurance at While Kavita’s case was rejected due to a significant medical procedure, not all surgeries or medical conditions lead to rejection.


Singhal notes, “There are cases where people who have undergone cancer treatment or angioplasty are covered under health insurance plans. Most health insurance policies cover minor to mild medical conditions. For severe conditions, insurance companies have specialised products to provide suitable coverage.”


What does full disclosure mean in insurance?


“The contracts of insurance are based on the doctrine of ‘Uberrima Fides,’ which means that both the insurer and the insured must disclose all material facts truthfully and completely,” explains Shashank Agarwal, advocate at the Delhi High Court. This means the insured must provide accurate information about any risks that could affect the insurer’s decision to provide coverage or determine the premium. In turn, the insurer must clearly explain the policy’s terms, including any exclusions or limitations.


Common reasons for health insurance denial


You might be denied health insurance for several reasons, including:


Pre-existing conditions that can’t be covered

Age restrictions

Employment status not meeting insurer’s criteria

Living in a country where the insurer cannot provide cover

High-risk lifestyle

Poor insurance history


Incomplete application


Insurance companies assess the frequency and severity of future claims. For example, a person with a critical condition is more likely to be hospitalised and thus more likely to make a claim.


What should you do if you’re denied coverage?


Singhal advises individuals to buy health insurance when they’re young and healthy to avoid complications later. If you have a medical condition, consult health insurance experts to find the right plan among multiple options.


There are specific health insurance policies designed for individuals with high-risk conditions, such as:


1. Star Cardiac Care: For those with cardiac conditions.

2. Star Cancer Care: For various cancer treatments.

3. Aditya Birla Activ One and ICICI Lombard Elevate: Covering ailments such as diabetes, hypertension, COPD, and heart ailments.

4. Care Freedom: Covering a range of pre-existing conditions and high-risk health issues.

5. Manipal Cigna Prime Senior Elite: For senior citizens, including cancer survivors.


What do insurers offer?


Insurance companies may provide specialised products or a counteroffer, such as co-payment, disease-specific sub-limits, or permanent exclusions. A person with a severe medical condition might receive:


A plan with an extra loading amount

A counteroffer with disease exclusions or co-payment

A specialised plan


“In recent times, insurers have started to relax criteria and now cover conditions like diabetes, hypertension, and heart ailments. The list of diseases that are straight declines has also reduced,” says Singhal.


What are your legal options?


“As an established principle, a contract of insurance becomes binding only when the parties have agreed on the terms and conditions. However, if the refusal is based on unreasonable grounds, the consumer may approach the ‘Insurance Ombudsman’ for redressal,” Agarwal says.


If you believe your application was unfairly declined, know that the Insurance Regulatory and Development Authority of India (Irdai) provides guidelines to prevent arbitrary denials. Insurers must provide detailed reasons for denial and adhere to fair practices.


“Policyholders can seek recourse before the insurance ombudsman or through the Consumer Protection Act, 2019,” says Alay Razvi, Partner at Accord Juris. He adds that individuals facing denial of health insurance in India should be aware of their rights and the regulatory frameworks in place to protect them.

First Published: Jun 27 2024 | 1:31 PM IST

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