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Pre-existing condition is a common term used by insurance advisers whenever you buy any life insurance. It is often defined as “any condition or illness which existed or was existing or the cause or symptoms of which existed or were existing or evident, or any condition or illness which the Life Assured suffered or was suffering from, prior to the policy issue date.” In short, it simply means any medical conditions you have before buying this life insurance policy.
There are 5 commonly asked questions that relate to pre-existing conditions that are very often fielded to insurance practitioners:
1) Can I buy any life insurance after knowing I have a pre-existing health condition?
Yes, you still can apply for life insurance, knowing you have a health condition. However, the insurance company will subject you to an underwriting process eg a mandatory health checkup, request for medical reports with your doctors etc to decide if they want to accept you as their client.
2) What are likely outcomes to my life insurance application if I have a medical condition during application?
There are 3 likely outcomes. Firstly, you can be accepted as like a normal healthy person if your ‘existing condition’ is nothing severe eg childhood asthma which you have fully recovered since 20 years ago and you have not had any relapse. Secondly, you can be accepted for the insurance coverage with ‘loading’ of premium which essentially means paying more for the same coverage as compared to a healthy person of the same age and gender. The loading may last for a few years or even throughout the premium paying term. Lastly, the bad news. If the condition is too severe, the insurance company will simply decline the application. For example, for a diabetic with unstable condition, he will be declined. (Do you know there are now insurers accepting diabetic patients who’s conditions are under control? To know more, please go to https://www.insuranceguru.com.sg/diabetes-insurance/)
3) How is “waiting period” related to my pre-existing conditions?
Waiting period is a time period where no insurance benefit is payable should the claim event occur. This is commonly found under critical illness coverage where for the first 90 days from policy commencement, no benefit is payable for heart diseases or cancer. You can check your policy wordings for exact details.
4) Can I choose not to declare my pre-existing conditions?
Insurance application is based on the principle of ‘utmost good faith’. Should the applicant willfully withhold any material information that would have affected the underwriting outcome, the insurance company can refuse payment for the claims when they arise.
5) How do I know which insurer will give me the ‘best deal’ after knowing my health conditions?
Different insurers may give you different underwriting outcomes for the same pre-existing condition as each of them has different ‘risk appetite’. For example, Insurer A may have very bad claim experience for Health Condition A and would decline any applicant with this condition compared to Insurer B who may accept the applicant with loading of premium instead. For a consumer to find out which insurance company can give him the ‘best deal’ or best underwriting outcome, he has to go through the tedious and repetitive process of applying with various insurers to find out. (To save the trouble of going to various different insurers on your own, you can also seek help here https://www.insuranceguru.com.sg/pre-existing-health-condition/)
It is no use buying an umbrella when you are already drenched. Like how I always advise my clients, buy your life insurance when you are young and healthy.
Insure yourself, protect others.
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The author of this article is Mr Sean Ong. He is a Certified Life Coach and a Chartered Financial Consultant with more than 14 years of experience in the finance industry. A shareholder with the one of the largest independently-owned financial advisory company in Singapore, Sean also leads a top financial advisory group and has been featured on the local TV and radio. In his efforts to contribute to the society, Sean ran 1,000km over 87 days to successfully raise more than $13,000 for a children charity in Year 2012. He also published a book called “Mend Your Socks!” where sales proceeds were donated to charity. Sean can be contacted at firstname.lastname@example.org.