If you have a pre-existing condition or had some symptoms that subsequently went away – how do you apply for insurance coverage? Is it important that you declare the condition? What if the insurer rejects you?
These are just some of the common questions I encounter from my clients. In this article, I hope to share some of the best practices in applying for insurance when you have a pre-existing condition.
To Declare or Not to Declare?
It is tempting to not declare our condition in the hope that our application does not get rejected or receive exclusions/loading. However, honesty is the best policy here. We run the risk of not receiving our claims should the insurer discover our non-disclosure.
The Life Insurance Association Singapore shed some light on the subject in their letter to the Straits Times:
“Section 25(5) of the Insurance Act states that “no Singapore insurer shall use, in the course of carrying on insurance business in Singapore, a form of proposal which does not have prominently displayed therein a warning that if a proposer does not fully and faithfully give the facts as he knows them or ought to know them, he may receive nothing from the policy”.”
“If the policyholder says he was not aware of his medical condition existing at the time of application or the need to declare it in the application, the exclusion clause kicks in if his medical records show that he already had signs or symptoms, or had received advice, diagnosis or treatment before commencement of the insurance.”Life Insurance Association Singapore
Err on the Side of Being Too Honest
How do we determine if a health condition is considered a material information we need to declare? With some good sense, we can probably guess what is considered material – such as having had a stroke before, or having a heart condition.
But how about that asthma incidence you had just once a few years back?
It could be such an insignificant incident to you because your doctor sent you home with an inhaler, and asked you to come back only if it didn’t get better. However, you never did and never had another attack since.
And that was what happened to my client. What we had assumed was a minor ailment was material enough to the insurers to counter-propose with an exclusion or to load the premiums.
Always Declare It
The truth is, we wouldn’t be able to accurately judge if a condition is important to the insurer. Hence, my advice for my clients when it comes to health declaration is to always declare it. This is the rare instance you wouldn’t be considered giving “too much information”.
Let the insurer review and decide if they want to provide you with coverage, impose some exclusions, or load the premiums. By following this practice, you will never run the risk of your claims being rejected at a time when you need the pay-out the most.
Appeal the Decision if It is Unfair
In the case of my client, the insurers counter-proposed the following for his shield plan and endowment plan premium waiver application:
Because my client does not actually suffer from asthma, we found the exclusion to the entire respiratory system and the loading to premium unfair and decided to appeal against it.
Thankfully, the insurers accepted our appeal – one counter-proposed to limit the exclusion to just asthma. The other removed the premium loading all together.
Get a Discharge Memo
As a general good practice, if you have a medical condition that you no longer see a doctor for, it will be in your best interest to request for a doctor’s memo discharging you of the condition or symptom.
The discharge memo will help in persuading the underwriters to give a favourable outcome for your insurance applications and appeals.
With this, I will like to add, not all appeals will be successful, which brings me to the next point:
Try Other Insurers
Sometimes, different insurers underwrite the same health condition differently. In my client’s case mentioned above, we applied with another insurer for his shield plan just to see if we can get a better outcome. This new insurer offered him standard coverage with no exclusions at all!
In another case, a client of mine was looking to get early critical illness (“ECI”) coverage for her baby who has albinism. Prior to that, she had applied to some insurers on her own but were rejected or given very unfavourable terms on top of premium loading. Nonetheless, we applied to the rest of the insurers that she has not tried. Thankfully one insurer was willing to cover her baby, with some exclusions that is specific to albinism and no premium loading:
We found the exclusions fair and reasonable, and my client accepted the offer.
Not Always Successful, But We Try
It is not unusual for the same insurer who had accepted a health condition previously to reject it now. The thing is, we can never be sure, so we have to try.
To be clear, it does not mean that we will surely be able to get coverage for our health condition. There are health conditions that insurers are simply not willing to underwrite. However, it does mean that we have covered all bases to get the best possible coverage for you.
Insurance for Selected Pre-Existing Conditions
There are special insurance for certain health conditions that would usually attract exclusions or rejection. If you have any of these health conditions, you might want to consider these plans. Do note, the coverage could be limited, or be more expensive than usual:
Raffles Shield [Hospitalization Insurance]
- Mild hyperlipidemia
- Mild hypertension
- Mild diabetes
Raffles Health is willing to provide coverage for these conditions with no exclusions but premium loading. Your health readings must be controlled, and you must be enrolled in a Chronic Disease Management programme. Premium loading will be reduced if conditions are controlled within their criteria.
HSBC Life Protect Advantage [Whole-life Insurance with CI cover]
- Benign breast disorder
- Elevated prostrate-specific antigen level
- Uterine fibroid
You can get 20% of your plan’s CI coverage (early to advanced) for the listed conditions, up to a cap of $50K, with no exclusions or premium loading. Other CIs will still enjoy full coverage. A medical reassessment between year 2 and year 6 to get full coverage is possible.
AIA Diabetes Care [Term insurance with limited Advanced CI cover]
- Type 2 diabetes
Plan covers 5 diabetes-related critical illnesses, a special amputation coverage and an optional rider that covers early to advanced stage cancer. Read more about the plan here.
Aviva MyCoreCI [Term insurance with limited Advanced CI cover]
- Type 2 Diabetes
- High cholesterol
- High Body Mass Index
Plan covers 11 CI conditions and 4 diabetes-related conditions. If no claim was made by the end of the coverage term, you get back 20% of the total premiums paid.
I Still Cannot Get Hospitalization Insurance Leh
International Health Plans
If you have tried all the insurers but still have no luck getting hospitalization insurance, you may want to consider international health plans, if budget is not an issue.
Some international health plans do cover pre-existing conditions, provided certain criteria are fulfilled. Some examples of international health plans that cover pre-existing conditions include Bupa International and AXA GlobalCare.
Group Health Insurance
Fret not if you find the premiums of international health plans too prohibitive. If you are employed with a company that provides employees with Group Health Insurance, you may be able to get coverage for your pre-existing condition. To be sure, do check with your human resource department on the terms of the coverage. In fact, someone dear to me relied on his company’s health insurance to cover for a surgery related to his congenital condition. He managed to get most of the bill paid for by the company’s insurer, with some co-payment on his part payable using his medisave.
Do take note though, in most cases, your Group Health Insurance will cease once your employment with the company ceases.
Lastly, if you are a Singaporean or Permanent Resident in Singapore, you have the safety net of Medishield Life. Medishield Life’s coverage extends to all residents of Singapore for life, regardless if you have pre-existing health condition, or if your baby is a newborn. Of course, the benefits are lower – they are pegged to local hospital’s B2/C class ward and require some degree of co-payment. Thankfully we are blessed with a world-class public healthcare system that are served by passionate professionals.
If you have further questions regarding insurance coverage for pre-existing health conditions or would like to find out more about the plans mentioned here, feel free to drop me a note. Otherwise, should you know of anyone who will benefit from this article, do share this article with them as well.
Note: Author is a Certified Financial Planner® with one of the largest financial advisory firm that partners with most of the insurers in Singapore.