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medical tests before buying health insurance
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Why are Medical Tests Important Before Buying Health Insurance Policy?

A health insurance policy helps the insured cover the various costs spent on pre and post-hospitalization. This substantially reduces the financial strain on the person. A health insurance policy includes medical check-ups at regular intervals to be able to detect such cases as early as possible. The check-up period varies by insurance provider.

However, apart from the standard medical tests, there is a medical test before every health insurance policy renewal. Such tests are to examine pre-existing health conditions. A pre-medical test is not mandatory and can be easily cleared by the policy purchaser. Above the age of 45 years, a pre-medical check-up is mandatory before a health policy can be bought. This condition varies marginally from one insurance provider to another. 

What are pre-existing medical health conditions?

People generally buy health insurance to protect ourselves from future uncertainty of life and death. Now while purchasing health insurance, you may have a pre-existing illness.

Insurance is costly that can barely be afforded by the public. On top of all that, if the person planning to buy such a policy discloses their pre-existing condition, the premium payable may rise sharply making it tough for the insurer purchaser to afford the cost.

Of course, different types of pre-existing illness can be developed during the term of the policy too. It is the responsibility of the policyholder to inform the insurer as soon as they get to know about it.

What does pre-existing illness mean?

A pre-existing illness means a person is suffering from a health challenge at the time of taking policy. The pre-existing condition includes medical injuries and illness. Diseases like cancer, diabetes, COPD, depression are pre-existing health issues. Normally, hypertension and diabetes are quite common but they would entail higher premium. 

Prior to 2010, if the person buying health insurance was suffering from any pre-existing ailment; then, the insurance company was authority to decline to provide a policy. They would normally later provide a policy at an inflated rate. This appears to be patently unfair and so the ACA (Affordable Care Act) declared it illegal for any insurance company to decline the client for purchasing health insurance on the grounds of a pre-existing condition. The inflating costs were inconsiderable. 

For example- If you have purchased a plan post-2010 then, the insurance company has no right to deny you coverage due to pre-existing conditions and, they are also not allowed to raise the premium for the same. Post subscribing to the plan, policy underwriting cannot be discontinued just because the insured develops a chronic illness. The insured needs to inform the insurance company. The policy provider is yet not allowed to raise the premium rates on the above grounds.

Example 2- If the insured has purchased an insurance policy pre-2010, then the insurance company has the right to cancel your plan or are free to charge you higher premiums, so this is possible only under ‘grandfathered plans’. Health insurance is no longer chosen based on pre-existing conditions.

Pre-medical tests:

While handing out an insurance policy to the subscriber, the company conducts a health check-up. This check-up is mainly done by the policy provider to draw out the possible risks and learn about an illness the insured is going through. An insurance company can ask for a medical health check-up to a person above the age of 45 years. However, it can vary according to the insurers.

According to IRDAI (Insurance Regulatory and Development Authority of India), the cost incurred for the pre-medical tests is equally divided between the policy purchaser and the policy provider.

Anyways due to rising competition, the insurance provider has taken up the cost for such medical tests to attract customers. It also helps the policy purchaser to become aware of their health and take the necessary precautions to stay out of trouble.

Why are pre-medical tests important?

  1. Risk tool

A pre-medical test is a medical examination. It further helps both parties to follow an easy claim procedure and the payment of lesser premiums. It also allows the insurance company to set a benchmark that helps measure the health of the policyholder.

  1. Suitable advice

Such a test is beneficial as the client can receive direct feedback from the insurance agent about which policy is the most suitable for you.

  1. Healthy cover

Normally, health insurers do not provide you coverage of more than Rs.5 lakhs without a medical check-up. In times of emergencies, such low coverage is not adequate and will be unable to fulfil the motive of financial security in emergency conditions.

  1. Benefits

A person with a healthy body and a sound mind can ace the medical tests. In such cases, the insurance company offers a policy at a discounted rate.

  1.  Coverage

As the insurance provider now has an idea of the pre-existing disease, one is suffering from the policy that will cover the condition too. It will help in future claims and easy reimbursement.

  1. Rewards

If you go for a health check-up and get positive results, the insurance provider will repay you the test money. The waiting period can also be waived in some cases.

Why do I need to disclose my pre-existing conditions to the insurance company?

It is necessary to do so because:

  • The provider accepts the claim only when complete information is given and this is a contract of good faith.
  • If the information stays hidden and you fall sick due to the same disease, the insurance company has a full right to decline your claim since the onus is on the insured to disclose all relevant details.
  • If you are admitted to a hospital but have not yet disclosed such kind of information, then it is quite possible that during claims there could be a hitch and claims could also get legitimately rejected.
  • Principle of Utmost Good Faith:

The principle of Utmost Good Faith is also called Uberrimae Fidei. Do not hide your pre-existing illness from the insurance provider. It will lead to various problems. Hiding such conditions from the insurer can put the insurance cover in jeopardy while making a claim.

Insurance companies work on the principle of ‘Utmost Good Faith’ which means the insured shall not keep any information undisclosed from the insurer. The material facts are those which affect the level of risk. If the policyholder does not disclose the real risk factors or misrepresents them, then the policy can be declared as null and void and the claim rejected.

Going through a medical test before buying is a difficult position, but it helps in the longer run. It will help both the insured and the insurer. The policy purchaser needs to be transparent while buying the policy that will play a large role during the claim period. It will facilitate the reimbursement to be faster and easier.

FAQs: Importance of Medical Tests Before Purchasing Health Insurance

What are the medical tests required to be done before buying health insurance?

Before buying health insurance or giving a medical test, you shall know that a pre-check-up is optional until the age of 45 years. So, you are free to skip the test. However, getting a pre-medical test is beneficial for both parties. The basic tests are:

1. Blood Test
2. Sugar level
3. Urine test
4. Physical Examination
5. Cholesterol level
6. ECG (Electrocardiogram)
7. CBC (Complete Blood Count)
8. ESR (Erythrocyte sedimentation rate)

These are the necessary tests needed. The medical costing for these tests can either be borne by the insurance company or you. It can be equally divided as well. One of the benefits mentioned above is that if you have good health and pass all the tests with positive results, the insurance company may choose to reimburse the test costs incurred.

Do I need to have a medical exam for life insurance?

It is optional for you to buy insurance without a medical exam only if you have an age of below 40/45 years. Anyways it depends on company to company. Usually, to purchase health insurance of the amount above INR 5 lakhs, a medical exam is needed. It helps the insurer to measure the risk tool. If you are buying insurance at a very young age, it might not be necessary to give a physical exam, but oral medical tests are a possible situation needed. In case you plan to buy insurance for a small amount, then there is no need for any medical exam.

What should one look for when buying health insurance in India?

While purchasing health insurance, you shall keep in mind your requirements, explain it to the policy provider, and accordingly choose the best plan that is tailor-made to your unique requirements. Free health check-ups, no-claim bonus, discount on premiums (if healthy), pre-existing disease coverage are some of the benefits you should not miss. Some of the other factors that can be looked out for are lifetime renewability, perks like gym memberships, club memberships, etc. Many insurance providers have tried giving out such benefits to standing out as a better insurance service provider. Cashless hospitalization is an important feature that should be looked at, first and foremost.

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