Did your insurance agent tell you not to disclose a pre-existing medical condition while buying health insurance? Experts say that one decision could decide whether your claim is approved or rejected years later.
After a recent viral dispute over a health insurance claim, questions are being raised about what really leads to claim rejection and has once again brought attention to a common issue in India’s health insurance market: non-disclosure of medical history.
Shilpa Arora, co-founder and chief operating officer (COO) of Insurance Samadhan, says non-disclosure is the leading cause of claim repudiation.
“As per our data, this is the number one reason for claim repudiation,” she said.
This means most disputes do not begin at the hospital. They begin at the proposal form stage.
LEGAL RESPONSIBILITY RESTS WITH THE CUSTOMER
Many customers believe that if they inform the agent verbally about a health condition, that is enough. However, the law views it differently.
“The legal responsibility rests with the customer, the proposer,” Arora explained.
She pointed to the doctrine of uberrimae fidei, or utmost good faith.
“The doctrine places the duty of disclosure squarely on the proposer, irrespective of what was told to the agent orally,” she said.
According to her, the insurance regulator mandates that customers must review the proposal form before signing.
She added that insurers are required to provide a free-look period so customers can recheck disclosures.
A free-look period is a short window after buying an insurance policy during which the customer can review the terms and cancel or correct details without penalty.
“Failure to correct omissions during this period strengthens the insurer’s right to repudiate,” she said.
CAN YOU CHALLENGE REJECTION IF AGENT ADVISED NON-DISCLOSURE?
Some policyholders argue that their agent told them not to mention certain conditions to avoid higher premiums or rejection.
But Arora says such challenges rarely succeed.
“Claim rejections challenged on the ground that ‘the agent advised non-disclosure’ are almost never overturned unless backed by written or recorded proof,” she said.
“Verbal claims alone do not stand,” she added.
She said this is something her firm regularly sees.
“This is exactly what we see at Insurance Samadhan too — and it’s a critical consumer-education gap.”
WHY THE PROPOSAL FORM IS CRITICAL
According to Arora, the proposal form is the foundation of the insurance contract.
“A policyholder must fill the proposal form completely, declare every medical fact truthfully and to the best of their knowledge, and verify all details before signing,” she said.
Any missing detail can become the basis for dispute later.
Arora said most repudiations linked to pre-existing diseases are not based on guesswork.
“Most PED (pre-existing disease) repudiations are triggered by what is written in the discharge summary or an old prescription unearthed during claim investigation — not by insurer assumptions,” she said.
This means hospital records and past prescriptions often play a key role in claim assessment.
WHAT PROTECTION DOES THE REGULATOR PROVIDE?
Arora said the Insurance Regulatory and Development Authority of India has introduced safeguards.
“Yes, IRDAI has introduced safeguards such as the free-look period, allowing customers to review and correct disclosures shortly after purchase,” she said.
She also pointed to the five-year moratorium rule.
“There is a five-year moratorium period after which claims cannot be rejected for non-disclosure except in cases of fraud,” she explained.
“These measures are aimed at reducing disputes and mis-selling in insurance.”
Experts say buying health insurance is not just about comparing premiums or coverage amounts. It is about accurate disclosure at the time of purchase.
Even if an agent suggests skipping details, the legal responsibility ultimately rests with the customer’s signature on the proposal form.
The lesson, experts say, is simple: transparency at the beginning may increase premium slightly, but it reduces the risk of rejection when you need the policy the most.
