Mohan Singh, a central government employee, was holding a mediclaim policy (no 111800/48//02/12829) for five years. But when he underwent a cardiac surgery this year, New India Assurance Company, the general insurer which sold Singh this policy, refused to pay his claim of Rs 95,000.

The insurer argued that Singh didn’t disclose he was diabetic while taking the policy. However, Singh has a no-claim record in the four years before he was detected with a heart problem.

The insurer, however, had to settle the claim on the directives of a consumer court that said the pre-existing disease clause cannot be invoked as the insured made no claim for four years before he was detected with the disease.

Diabetes is a silent killer, but there is little insurance cover available to people against the disease. Almost everyone knows someone who has diabetes — there are about 30-33 million diabetics in India at present. According to the World Health Organisation, the number of diabetics in India would go up to 40 million by 2010 and 75 million by 2025.

Lifestyle disease

“Diabetes, unfortunately, is the price you pay for success,” said Dr S.C. Manchanda, head, department of cardiology, All India Institute of Medical Sciences, New Delhi. Lifestyle diseases such as diabetes and hypertension are a result of increased work pressure, bad food habits and a sedentary life.

No legal help

The cost of diabetes care and control is increasing at a rapid pace. But, unfortunately, there are no laws in the country like those in the US that prevent insurers from denying policies to diabetics.

As of December 2005, 46 states in the US have some law requiring health insurance coverage to include the treatment for diabetes.

Back home, insurers try their best to decline claims if the insured discloses diabetes. Insurers also charge a very high premium to cover people who are diabetic. Diabetes has cost implication even in mortgage insurance (term-reducing loan cover) and motor insurance.

Covering up

Health insurance in the country has been provided by general insurers in the form of mediclaim since 1996. But none of them have insurance for preventive healthcare. Besides, insurers don’t sell fresh health insurance policies to people above 60, though an already insured person can renew the policy till he or she attains the age of 75 or 80. Such renewals take into account the claim history of the insured and the new premium is fixed accordingly.

Almost all these mediclaim policies come with a clause that if no claim is made during the first three or four years of commencement, pre-existing diseases such as diabetes and hypertension are covered in the succeeding renewals. The National Insurance Company and Bajaj Allianz General Insurance Company are offering health plans that include pre-existing diseases such as diabetes and hypertension. However, the premium cost of such a policy is 20-25 per cent higher than usual mediclaim policies.

Since the sector was opened up to private companies, life insurers are offering critical illness cover for stroke, kidney problems arising out of prolonged diabetes as riders to the base policy at an additional premium not exceeding 20 per cent of the premium for the base policy. But till recently, none of them offered standalone health policies.

Diabetes Care

ICICI Prudential Life Insurance Company has recently come out with a standalone health policy called Diabetes Care for people with the disease. The five-year plan covers six critical illnesses arising out of diabetes and once the insured is detected with any one of these six diseases, the sum assured will be paid.

However, the premium is pretty high — a 25-year-old male will have to pay a premium of Rs 8,000 for a sum assured of Rs 1 lakh, while the premium goes up to Rs 25,000 for a 55-year-old for the same sum assured.

If you can keep your sugar level in check, you will be rewarded with a discount of 30 per cent of the first year’s premium. But if your sugar level goes up, your premium cost will simultaneously go up to 17.5 per cent above the first year’s premium. In other words, you will have to spend a lot in keeping your diabetes in control. The premium paid is not refunded in case no claim is made.

Other options

Tata AIG Life Insurance covers pre-existing diseases, including diabetes, for the first three years in its Nirvana Plus pension plan. LIC is also planning to enter the health insurance business.

The silver lining

However, the future seems to hold more promise. Last year, the Insurance Regulatory Development Authority constituted a Health Insurance Working Group and has set up a separate division to address the roadblocks in the health insurance business, particularly pre-existing diseases. The authority also wants life insurers to offer dedicated health plans.

It has recommended multiple health insurance products at various price points for customers, a common pool concept for the terminally ill and people who don’t have access to medical insurance, standard definition, interpretation and guidelines regarding pre-existing diseases and a ‘medical savings product’ for the younger age group.