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Why do Health Insurance companies not cover pre-existing diseases?Pre-Existing Condition means any known medical condition, ailment or injury or related condition(s) you had within 48 months prior to the commencement of your health insurance policy with the following characteristics:

You have signs or symptoms of the condition and/or were diagnosed for the same
You have received medical advice/ treatment
You have undiagnosed symptoms, whether recognised or not

Why don’t companies cover pre-existing diseases? Well, the answer is quite simple. The likelihood of taking treatment for an existing ailment is a known risk and insurance covers only unknown risk. If health insurance companies decide to cover pre-existing condition, then everyone will take insurance only after they have been affected. It goes against the very principle of Insurance, which is collecting premium from many to make payment of claims for a relatively few claimants.

Health Insurance Companies however do cover pre-existing diseases if the policy remains with the company for four years and it is renewed thereon. It is not always necessary that pre existing disease has to be serious diseases like heart attack or cancer. It can be as simple as asthma or a sports injury. In recent times, Insurance companies are coming with products with limited or no waiting period for PED. There could be some catch regarding the extent of Sum Insured which is available for such illness / disease. So go through your policy and choose wisely.

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6 responses to “Why do Health Insurance companies not cover pre-existing diseases?”

  1. Dilip Sharma says:

    Useful post. But, Be careful of PED clause of 4 yrs bcoz insurance companies have changed their policies to include only the base cover and exclude cumulative (loyalty) bonus cover.

  2. shrawan deore says:

    It is very useful information. Thanks.

  3. kutumbarao says:

    ur apprehension that all will opt for health ins if PED
    r also covered is not strictly valid if percentage of health conscious persons who have taken health insurance is taken out of total life insurance taken persons and if PED OPTION IS GIVEN WITH UR TERMS AND CONDITIONS IT WILL GO ALONG WAY in bringing those who r yet to decide.Ins is one of chance and not one of certainty

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  5. T.S. Chandra says:


  6. Tushar says:

    Who decides Pre-Existing diseases? Royal Sundaram? What is the level of expertise of these people?
    I am sure accountants decide this based on the claim amount. Otherwise you would be giving proper logical explanations for claim rejections under tis clause rather than stating “prescriptions indicate that this is pre-existing disease.”
    I am not sure about others but Royal Sundaram rejects claims under this clause ONLY BASED OF FINANCIAL CONSIDERATIONS.

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