Why honesty is the best policy when an insurer conducts a medical evaluation

One of the least palatable aspects of buying a health insurance plan has to be the medical evaluation. Nobody likes answering questions about their past medical history. And some may even have good reason to not divulge anything material. The last thing you want is to spend a whole bunch of time dealing with this rigmarole only to find out that the insurer doesn’t want to extend a policy because you suffered a concussion eight years ago.


Pre-existing conditions can affect claims later

And it’s no surprise most people simply choose to keep mum. They hide material information and they do so under the assumption that this detail is impossible to uncover. However, this isn’t an accurate assessment. If anything, it is a dubious one.

Let me explain. Imagine you’re suffering from diabetes and you choose to hide this information to get yourself a better deal. Now it’s possible that the insurer may be lax in their approach and actually issue you a policy without additional checks, in which case the health insurance will be in force. But let’s suppose a year later, you come down with a bad case of retinopathy. After putting up with crippling diabetes for eight years, the blood vessels in the back of your eyes are now shot. You need surgery and you need it now. Your only saving grace is the health insurance policy you bought recently. But as we already noted, you thought you could outmanoeuvre the insurer by simply making no declaration about your past medical history.

And it’s going to bite back at this point.

Because when you make a claim, insurance companies are going to be extremely thorough with your medical records. They’ll sift through the discharge summary and any other document on record to evaluate if you have a history of diabetes. In fact, they’ll already suspect something is amiss since retinopathy mostly presents itself in patients with uncontrolled diabetes. And once they go through your past medical history, they’ll have enough evidence to repudiate your claim.

Sure, you could try and fight back by going to the regulator. Or perhaps take a punt by approaching the courts. But this is a battle that you will not win. You won’t have time on your side and you won’t have the patience to fight it out. It’ll probably be more expensive than the insurance plan itself. In all likelihood, you’ll be throwing more good money after bad and it’s not a position you’d want to find yourself in.

When you’re making those declarations and insurance companies take you at your word, they’re not doing so because they’re gullible. On the contrary, they are playing this really smart. They know that they can weed out most frivolous claims at the time of hospitalisation, and if anything, this arrangement works in their favour. You’ll be paying them good money until you make a claim and they can simply refuse to compensate you the moment they find the slightest discrepancy.

Also read: One year of COVID-19 – the tale of unsettled health insurance claims  

Protect yourself from these exigencies

Well, first things first. Declare everything  —  even if you think it’s insignificant. In fact, most customers withhold information not because they harbour malicious intent, but because they don’t think it qualifies as anything material.

Somebody with a history of hypertension may think it’s insignificant to divulge this information when it’s under control. But if you’re keeping it under control using a medication, then it qualifies as a pre-existing condition. It doesn’t matter if you think it’s benign, so long as you’re popping pills.

Recent surgeries and genetic conditions also count. If you had a crippling disease a few years back but made a full recovery, that may also be relevant if you’ve received treatment/consultation within 48 months of buying the policy.

Bottom line  —  it would bode well for you if you were completely transparent about your medical condition. Sure, the insurer may refuse to extend a policy or in some cases throw in a waiting period or an extra charge (loading), but that's a better alternative than finding your claim denied because you weren’t acting in good faith.

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