{"id":399887,"date":"2024-12-20T16:03:22","date_gmt":"2024-12-20T10:33:22","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=399887"},"modified":"2024-12-20T16:03:22","modified_gmt":"2024-12-20T10:33:22","slug":"avoid-surprises-why-disclosures-are-important-in-a-health-insurance-policy","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/varsity\/avoid-surprises-why-disclosures-are-important-in-a-health-insurance-policy","title":{"rendered":"Avoid surprises: why disclosures are important in a health insurance policy"},"content":{"rendered":"

When it comes to health insurance plans, every policyholder has one essential requirement\u2014transparency from the insurer.\u00a0<\/span><\/p>\n

Everyone seeks a health insurance provider who will be upfront about a policy’s drawbacks, exclusions, and probable suitability. Let\u2019s be honest about it, health insurance policy documents are a maze\u2014a deadly combination of legalities, medical terminologies, and financial jargon.\u00a0<\/span><\/p>\n

Unfortunately, most providers are not straightforward about the cons of their policies. This pushes potential health insurance buyers to seek expert guidance from neutral platforms that would help them choose the best possible policy.\u00a0<\/span><\/p>\n

On the other hand, health insurance providers have a similar ask – transparency from their potential policyholders, or in other words, disclosures. So, what are these disclosures in health insurance plans? What can happen if you fail to disclose details to your health insurance providers?\u00a0<\/span><\/p>\n

Here\u2019s what we have gathered from the industry experts at <\/span>Ditto Insurance<\/span> –\u00a0<\/span><\/p>\n

What are Disclosures in Health Insurance Policies?<\/b><\/p>\n\n\n\n
\nIn a Nut Shell: <\/b>Medical history details of the policyholder\u00a0<\/span>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

There are certain details that you are expected to be transparent about when applying for a health insurance plan. This involves details regarding –\u00a0<\/span><\/p>\n

    \n
  1. Your pre-existing medical conditions (anything that you have been diagnosed with and have taken medications for over the last 3 years. On the other hand, it\u2019s best to declare any and all prior ailments that you have been diagnosed with across your life.)<\/span><\/li>\n
  2. Any family medical issues (in case you have been diagnosed with the same medical condition as any of your other family members)\u00a0<\/span><\/li>\n
  3. Your prior history of hospitalisation\/treatments or surgery (along with the reasons, frequency, and the tenure of your stay – submitting reports would be helpful)\u00a0<\/span><\/li>\n
  4. Any diagnosed chronic ailment (any ongoing medication or any medications taken in the past with prescriptions, if possible)<\/span><\/li>\n<\/ol>\n

    These are called disclosures in health insurance.\u00a0<\/span><\/p>\n

    Here is an example of two real cases where there has been a risk of claim rejection and, in the worst case, policy termination.\u00a0\u00a0<\/span><\/p>\n

    Case 1:\u00a0 A case where mild non-disclosure could be requested to be reconsidered<\/b><\/p>\n

    In November 2022, a policyholder bought a health insurance plan for his parents through an expert platform. However, he didn\u2019t disclose that his father had been taking hypertension medication for 12 years.<\/span><\/p>\n

    In April 2024, his father was hospitalised in Chennai for a kidney infection (Pyelonephritis). The family filed a cashless claim for \u20b91,00,000, but it was rejected when the insurer discovered the undisclosed hypertension.<\/span><\/p>\n

    This highlights the risk of non-disclosure\u2014claims can be rejected. The intermediary suggested filing a reimbursement claim (where you pay upfront and claim the expenses later). The waiting period for hypertension under the policy was two years. Since that period had passed and there were no further non-disclosures, the insurer approved the reimbursement. However, you must understand that all insurers may respond in the same way.<\/span><\/p>\n

    While the claim has been approved, the family has had to endure the stress of rejection and the anxiety of waiting to see if it will be accepted.<\/span><\/p>\n

    Case 2: A case of non-disclosure that led to policy termination<\/b><\/p>\n

    Let\u2019s look at another case –<\/span><\/p>\n

    In February 2024, an individual bought health insurance through a platform but failed to disclose her history of strokes since 2021.<\/span><\/p>\n

    In August 2024, she filed a claim for a heart attack requiring hospitalisation. The insurer reviewed her records, found the undisclosed strokes, and rejected the claim.<\/span><\/p>\n

    The policyholder argued she had mentioned a past hospitalisation (for diabetes, not strokes) to the advisor, but it wasn\u2019t noted. Despite her efforts, the insurer rejected the claim and terminated the policy.<\/span><\/p>\n

    In this case, the claim wasn\u2019t just rejected\u2014the policy was terminated, which would make it harder for the policyholder to get another policy.<\/span><\/p>\n

    These examples highlight the importance of disclosing medical conditions when applying for health insurance. Now, let\u2019s focus on what disclosures are and the possible consequences of non-disclosures.<\/span><\/p>\n

    Why are Disclosures Important for Insurers in Health Insurance Plans?<\/b><\/p>\n\n\n\n
    \nIn a Nut Shell: <\/b>It determines the premiums, choice of health insurance plans, and underwriting directions.\u00a0<\/span>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n