When 60-year-old Ajay Shah (name changed) approached a private
general insurer for a health cover, he was asked to undergo a pre-issuance medical test.
Confident of sailing through, an otherwise fit Shah was stumped when his application was
rejected on detection of an urine infection. Days later, Shah approached another insurance
company. This time, the check-up did not reveal any infection as he had overcome the same in
the intervening period.
Cause and effect
Shah's case demonstrates the extreme caution health insurers
are exercising these days. Underwriting processes have become stringent, resulting in
increased proposal rejections. "Insurance companies have become extremely conservative. Even
proposals from those with lifestyle diseases are not being approved, unlike earlier when only
major surgeries and ailments were treated as pre-existing diseases that warranted
rejections," says Mahavir Chopra, Head, Health, Accident & Life Insurance, Coverfox.com, a
health insurance consultancy portal.
The life-long renewability clause introduced by Insurance
Regulatory and Development Authority of India (Irdai) has also increased the risks for
insurers. CEO of Vantage Insurance Brokers Arvind Laddha says it's primarily insurance
companies which have priced their products low or do not conduct medical tests for those
under 45 which are taking extra care. "Those who charge relatively higher premium continue to
issue policies like earlier," he says.
Adverse medical history, specifically pre-existing diseases,
are the most common cause of rejection of a policy proposal. "Even those in the younger age-
groups with lifestyle diseases like diabetes or slipped disc are being denied covers. The
rationale is that they are unable to take proper care of themselves, which translates into
higher risk for the insurer," says Chopra.
Other common reasons for denial of coverage include age and
financial position. Insurers tend to see those in the higher age bands as riskier customers,
irrespective of the state of their health. "Income is also a factor, particularly if someone
with a lower income were to opt for a high sum insured, even if it means paying a high
premium," says Laddha.
Make your case
Given that insurers are jittery when it comes to taking on
'riskier' proposals, you need to take certain steps to make sure your application goes
through. For one, you can start by being cautious yourself to avoid cases like Shah's. Before
buying a policy, get a check-up done on your own to rule out minor illnesses that can lead to
proposal rejection or even loading of premium, where insurers issue policies, but hike
premiums citing adverse health history.
This apart, ensure you disclose all the information asked for.
Remember, you would be weakening your case if you do not reveal any health conditions in the
proposal form and they are discovered at the time of medical check-ups. "Even in case of no-
medicals policy, it's best to be transparent. After all, in general insurance, unlike life
insurance where claims have to be paid after three policy years, claims can be rejected on
the grounds of suppression of facts," says Laddha. The policy is issued on the basis of
warranties given by the insured. Any inconsistency can result in claim rejection, defeating
the purpose of policy purchase.
Also, once the procedure to assess your medical status begins,
do not cede complete control to the insurance company. Insist on getting examined at a
reputed laboratory as their findings have a major role to play in issuance of policy. "If in
an ill-equipped lab, the officials reading your ECG are not qualified, they could release
potentially adverse reports, which could influence the insurer's decision to extend the
cover," says Chopra.
While the ultimate decision will rest with the insurer, small
measures at your end can go a long way in ensuring a hassle-free policy processing
To reveal or not to reveal
Policy buyers often suppress facts:
49%: Policyholders are not sure whether they should disclose
their pre-existing ailments at policy inception
27%: Policyholders would rather not declare any PED while
purchasing the policy
34%: Feel they do not need to disclose pre-existing lifestyle
diseases like diabetes and hypertension if they are under control