Pre-existing Condition in Travel Insurance


Pre-existing Condition in Travel Insurance

What is Travel Insurance?

If you have a health insurance policy in India, you could claim for any hospitalization anywhere in India, but while travelling abroad, the same policy might not cover everything. Then, taking a travel insurance plan that could cover all your medical expenses in a foreign location would be advisable. The other advantage of taking a travel insurance policy instead of a health insurance plan is that it is cheaper. A travel insurance plan is 10 times cheaper than a health insurance plan in India, whereas it would be more than 100 times cheaper than a health insurance plan abroad. One should note that a travel insurance policy is mandatory for many countries before entering their areas and they expect travelers to have a travel insurance policy before issuing a valid visa. While some countries even specify the minimum coverage before entering their space, travel insurance is even more attractive.

The most common illnesses or hospitalizations while travelling include upset stomach, road accidents, accidental injuries, dental issues, etc., which would be costly in a foreign country. Having a travel insurance policy before travelling to a foreign country is advisable. In addition to the medical expenses, travel insurance also covers other claims such as loss of baggage, cancellation of flights, cancellation of hotels, missed flight, loss of passport and other important documents, etc., under the same policy.

Travel insurance can be taken for a single trip or a multi-trip. A single-trip policy is valid only for a particular period of time. Before the policy expires, the insured is expected to return to the home country. However, the concept is different in multi-trip policy; one can travel multiple times during the policy period to a foreign location. The maximum number of days one can stay in a foreign location continuously is 180 days, after which one has to return to the home country and make travel plans again. The multi-trip policy is usually given for a period of 1 year, and the insured is permitted to claim during the policy period after satisfying the policy requirements.

Pre-Existing Conditions (PED):

Pre-existing disease (PED) means any condition, ailment, injury or related condition (s) for which the insured has been experiencing symptoms or signs, and the insured was diagnosed, or the insured had undergone treatment or medical advice within 48 months before the inception of the first insurance policy. Once the policy has lapsed, the accrued benefits, such as PED benefits, would be lost, and the insured has to wait for the specified period before making a claim again. Any condition before taking a new policy would be treated as a pre-existing condition and processed accordingly.

Unlike life insurance plans, travel insurance plans cannot be reinstated and continued with the same benefits. This makes it more difficult to renew a health/ travel insurance plan after it is lapsed. Most travel insurance plans would cover certain pre-existing conditions after they are declared in the proposal form and opted for a PED waiver under the policy. It is worthwhile to buy a travel insurance policy with PED inbuilt cover.

Let us illustrate that Mr.A and Mrs.A are planning to visit the USA for their son’s convocation ceremony. They have taken a travel insurance policy for $5Lakh from XYZ insurance company. Mr A was under medication for High blood pressure and had declared the same in the proposal form. In contrast, Mrs A has a skin condition where she would suffer allergy if exposed to sunlight for an extended period of time. Mrs A didn’t declare this condition in the proposal form, thinking it was unnecessary as she had not used any medication for it. One day, Mr & Mrs A went to a beach with their son, and there, Mrs A developed a skin allergy and was admitted to the hospital for treatment. To her surprise, her claim was rejected by the insurance company, stating that she was well aware of her condition before taking the policy but failed to mention it in the proposal form, which is a gross violation of the insurance principle of “Utmost Good Faith”. Had Mrs A declared her condition in the policy, she would have been covered if they had opted for PED coverage under the travel insurance policy.

PED in Travel Insurance:

Pre-existing conditions in travel insurance are generally excluded from the scope of coverage. Still, certain insurance plans cover the PED conditions in case of an emergency or a life-threatening situation. Different insurance companies interpret the concept of a life-threatening situation differently, as there is no proper definition for the same. Everyone would agree that a heart attack is a life-threatening situation covered as a PED. Still, certain instances, such as seizures, asthma, etc., could turn out to be fatal if proper treatment is not provided within the defined time period. Here are certain court rulings regarding Pre-existing conditions covered in India:

  • A court in Vadodara has ordered the insurance company to settle the claim by paying repatriation expenses if the insured person dies while travelling in a foreign location, even if the insured had not declared the pre-existing condition when taking the policy. The case’s background is that one Mafatlal Chauhan took an overseas travel insurance policy from Oriental Insurance Co. Ltd in March 2010 while travelling to Singapore. During his travel and stay, he experienced an ischemic heart disease and expired; his mortal remains were flown to India for final rites. His family had filed a claim for the repatriation expenses. Still, the insurer refused the claim, quoting the non-revelation of the PED condition when taking the policy. The aggrieved family has approached the consumer forum, which ordered the insurance company to pay the claim. 
  • State Consumer Disputes Redressal Commission of Punjab & Chandigarh has ordered United India Insurance to pay Rs.31 Lakhs to one Surinder Kaur, who had undergone treatment for acute Osteomyelitis of which she was unaware and was not a PED. However, the insurance company neither responded to the cashless facility nor the reimbursement option. The insurance company denied the claim, stating she was treated for lumbar disc replacement, which was not the case. After hearing from both parties, the court ordered the insurance company to pay the claim with interest.

Sub-Limits of PED Cover in Travel Insurance:

Most travel insurance plans come with a sub-limit for medical expenses only in case of a life-threatening condition arising from a PED. The sub-limits would be different for different insurance companies. Here is a list of insurance companies and their sub-limits:

  • Chola MS’s overseas travel insurance plan covers the entire medical expenses due to PED up to the sum insured limit if the PED extension (optional) cover is purchased on payment of an additional premium. In such cases, the insurance company’s liability would be the medical expenses incurred by the insured for such treatment or the sum insured, whichever is lesser.
  • TATA AIG’s overseas travel insurance policy covers the medical expenses arising from a pre-existing condition or any complication in a life-threatening situation would be covered up to $ 1,500 per policy.
  • Care Health insurance covers the PED claims in case of life-threatening situations up to 10% of the sum insured.
  • Bajaj Allianz travel insurance covers PED claims in case of life-threatening situations up to $1000 per policy.
  • Reliance travel insurance covers PED claims in life-threatening situations up to 1% of the sum insured up to a maximum of $10,000 for medical expenses, including Transportation, Evacuation and Repatriation of mortal remains.

The Pre-existing conditions in a travel insurance policy would change from one insurance company to another, and customers need to check coverage eligibility in case of life-threatening conditions under the PED before taking a travel insurance policy. One can contact our travel insurance experts at Ethika Insurance Broking to understand the Pre-existing sub-limits in a travel insurance policy and choose accordingly.

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Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Management.