IRDAI removes controversial pre-existing disease clause in guidelines

IRDAI has removed a controversial pre-existing disease clause in the standard health insurance guidelines. This will benefit buyers

Published: February 12, 2020 at 10:27 am

IRDAI with an aim to ” rationalise and standardize the exclusions in Health Insurance” had released a set of guidelines in Sep 2019. On Feb 10th 2020, they have made an important amendment to these guidelines removing a controversial pre-existing disease clause. A look at why this is controversial and how its removal will benefit buyers.

The guidelines apply to all General and Health Insurers offering indemnity based health insurance (excluding personal accident and Domestic / Overseas Travel) policies offering hospitalisation, domiciliary hospitalisation and day-care treatment.

This standardization in wording removes a big chunk of confusion for at least discerning buyers who bother to read terms and conditions of the policy purchase. Let us first look at the statement removed from the Definition of Pre-Existing Disease  (PED)

A condition for which any symptoms and or signs if presented and have resulted within three months of the issuance of the policy in a diagnostic illness or medical condition. (this has now been removed from the definition of a pre-existing disease)

Why is this controversial? Suppose you buy a policy in Feb 2020 and within three months of the policy issue, say April 2020, a routine test reveals that you are diabetic, or have a faulty liver or have cardiac issues etc. There was no indication of this problem when you applied for the policy and therefore no mention of it in the application.


Five years pass without a claim. in May 2025 you get admitted. While taking down your medical history, the doctor mention in the report, “diabetic since April 2020”. For the sake of simplicity let us assume that diabetes is directly related to the cause of hospitalisation.

This is enough reason for the insurer to reject the claim because you had a pre-existing condition diagnosed within three months of the policy issue. This is unfair to policy-holders and thankfully now has been removed.

Definition of Pre-Existing Disease  as per Guidelines on Standardization of Exclusions in Health Insurance Contracts

Reference: IRDAI/HLT/REG/CIR/046/02/2020

Pre-existing Disease means any condition, ailment, injury or disease:

a)That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement  (Feb 2020 circular includes reinstatement term and clarifies date of policy issue)  or

b)    For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement

(Life Insurers may define norms for applicability of PED at Reinstatement)

Other changes made in the guidelines

1. For “life-threatening situations following an accident” treated in a hospital excluded specifically by the insurer, “expenses up to the stage of stabilization are payable but not the complete claim”.

This has now been modified to “life-threatening situations or following an accident” That is,  an emergency admission can be done in a hospital excluded from coverage regardless of whether it was caused by an accident or not.

2. The term “birth control” has been removed from “exclusions Q: Birth control, Sterility and Infertility”. This is not expected to have a positive or negative impact on both the insured and insurer!!

Do share if you found this useful

We now publish both equity fund and debt fund (+ hybrid fund) screeners each month!
Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video!  More than 415 investors and advisors use this!
Unlock the secrets of successful financial advisors and entrepreneurs with our new course!
My new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Did you know? We have more than 1000+ videos on YouTube to explore! Join our YouTube Community!

Join our courses in exclusive Facebook Groups!

  • 550+ members are now part of our new course: How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills and building a community that trusts you and pays you!
  • Goal-based portfolio management! Join 2220+ members and get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment of Rs. 3000 only. No recurring fees! Life-long access to videos (10+ hours content)  in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps