Most people who buy an insurance policy do not know the implications of the exclusion clauses. In fact, they rarely read them, as they are often in fine print and tricky legal jargon.

One such booby trap in a Health insurance policy is the "Pre-Existing Condition" clause, the darling of insurance companies. Did you know that in 3 out of 5 claims rejected by insurance companies, the cause of rejection is attributed to this clause ? And surprisingly, nobody talks about it when they sell you a variety of health insurance plans with "great features" and "attractive discounts".

In fact, the spotlight of health insurance marketing seems to be on the features, convenience and low prices. In the booming insurance market in India, we have close to a dozen insurance companies offering a variety of health insurance Plans: with individual benefit amounts, with family floater etc. But what is not told in the glossy Ads or Brochures is the fact that most of these Plans have a common exclusion called “Pre-existing conditions”.

What is this “Pre-existing condition” all about ? Any disease / ailment / injury which you had when you bought health insurance for the first time is outside the scope of the Plan. The clause further states that pre-existing condition could be known / unknown, declared / undeclared, treated / untreated.

The implication of this “Pre-existing condition” clause is that if the person gets hospitalized and the treatment has any link to the hypertension, diabetes, kidney or heart problem which he / she had at the time of buying the health insurance, be it 6 months, 1 year, 2 years or 4 years ago, the insurance company will reject the claim. And there is nothing that you can do about it. The pre-existing condition clause is like a Democle’s Sword, hanging always on your health insurance claim. The insurance company can always find a remote link of the present treatment to a condition / symptom you had years ago. Imagine any teatment that a 50+ person takes as an in-patient in a hospital that cannot be linked even remotely to his / her medical history.

Is there a custom made health plan which can include treatment for a Pre-existing Condition ? Is there a Health Plan without the nuisance of “Pre-existing conditions” exclusion clause ? The answer was NO until recently. But the insurance companies are waking up to the need and the potential that this segment offers.

Bajaj Allianz was the first company to come out with a plan “SILVER HEALTH” catering to the age group 46 – 75 Years. The best part of this plan is that “Pre-existing conditions” are covered, though from the second year of buying the Plan. Age at entry is restricted to 70 Years but the policy can be renewed till 75 Years. Cashless facility is available for treatment for which Bajaj Allainz have a direct tie-up with hospitals across India. You can choose the benefit amounts ranging from Rs.50,000 to Rs.3 Lakhs per person upto the entry age of 55 Years. For persons above 55 years, the benefit amount can be upto Rs.2 lakhs only.

National Insurance Company has a plan called “VARISTHA MEDICLAIM” designed for the age group 60 – 90 Years. This Plan also covers “Pre-existing conditions” from the second year of buying the Plan. Age at entry is upto 80 Years only, though the policy can be renewed till the age of 90 Years. Cashless facility is available for treatment in hospitals across India through a TPA (Third Party Administrator). The benefit amount here is a standard Rs.1 Lakh only.

One has to undergo pre-acceptance medical check-up while buying these plans.

You can either take a discount of 5% on your premium for every claim-free year or allow the Benefit amount to go up by 5% for every claim-free year.

These designer plans though come with a slightly stiffer price tags, almost 40-50% more than the vanilla plans. Says Indira, Vice-President & Lead Consultant at Dr. Insurance, “Yes, these Plans are a little expensive, but they don’t put you on tenter-hooks when you have to make a claim. You don’t have the tension of wondering if the pre-existing clause will hit your claim.”