Pre Policy Medical Tests in Health Insurance

Why is a Pre Policy Medical Test Important?

Pre-policy medical tests are compulsory for the majority of health insurance policies available today. These tests are important because they act as a benchmark against which the insurance company can measure the policyholder's health. Any pre-existing medical conditions and illnesses would come to light through such a test, allowing the company to make a decision on appropriate cover for the particular individual.

The tests are also important when it comes to filing claims. If the policyholder files a claim and the company can prove that the illness was caused by a pre-existing medical condition that was not disclosed or proves that the policyholders deliberately withheld information regarding his/her medical health, the claim could be repudiated. By undergoing a pre-policy test, the policyholder's medical health will be on file, making it easier for both the insurance company as well as the policyholder to investigate and file a claim, respectively.

What are the Tests Usually Conducted?

Each insurer has a different risk assessment policy, based on which a life assured's medical risk is measured. The risk is measured by a grid, with the policyholder's age and coverage amount being the parameters of the grid. Based on these two factors, the type of tests would be administered to the policyholder. The usual tests administered are measurement of blood pressure, ECG, lipid profile test, blood serum test, complete blood count, blood sugar etc.

Who Pays for the Tests?

According to rules laid down by the Insurance Regulatory and Development Authority of India (IRDAI), at least half of the costs of the tests is to be borne by the insurance company, and the balance is to be paid by the policyholder. With the high competition in the market and to reduce the burden on policyholders, a number of insurers choose to cover the cost of the tests themselves.

Some health insurance policies stipulate that the policyholder would have to cover the costs of the pre policy testing, with the amount being reimbursed after the cover has been granted.

What Happens After the Tests are Conducted?

Once the results are received, the company will take a decision on whether to cover the policyholder under the terms mentioned in the policy proposal. This is generally the case. If the tests show an illness or medical condition, the company can opt for any of the following:

1. Higher premium: The company could issue the policy and extend cover to the individual but at a higher premium to cover the cost of expenses due to the condition/illness detected. The increase in premium would depend on the severity of the illness and the policyholder's age.
2. Permanent exclusions: The company could choose to issue the policy but exclude cover for the condition/illness detected. This is done if the company's underwriters deem the illness too risky to be covered. In such a case, if the policyholder receives any medical treatment due to the excluded illness, he/she will not be able to file a claim of recompense.
3. Rejection: In cases where the illness is very high risk or would require frequent treatment, the insurer could choose to reject the policy proposal.

While there are policies that do not mandate pre-policy medical examinations, it is advisable to undergo the tests as they pay dividends in the long run and help avoid the possibility of a rejected claim at a later date.

GST rate of 18% applicable for all financial services effective July 1, 2017.

Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.