【Pre-existing Conditions Unknown at Purchase】How can pre-existing conditions be unknown? What should you be aware of when buying insurance?

The Voluntary Health Insurance Scheme (VHIS) has been introduced for over three years, with one of its key selling points being the coverage of "pre-existing conditions unknown at the time of application." This term might sound somewhat complex, but what does it actually mean? And what significance does it hold when comparing insurance products?

In simple terms, "pre-existing conditions unknown at the time of application" refers to health conditions that show no apparent symptoms at the time of application and of which the policyholder is unaware, such as a long-existing cerebral aneurysm.

Table 1: Comparison of Pre-existing Conditions and Unknown Pre-existing Conditions

These types of conditions, medically determined to have existed for some time, are often not compensated under many traditional medical insurance plans, even if the policyholder claims to have been unaware of them at the time of application. However, under the rules of VHIS, even if an insurance company does not provide compensation for "unknown pre-existing conditions at application" in the first year, partial compensation of 25% is available in the second year upon diagnosis, 50% in the third year, and 100% from the fourth year onwards.

Table 2: Differences in Coverage of Unknown Pre-existing Conditions between Traditional Medical Insurance and VHIS

"Pre-existing conditions unknown at the time of application" can easily lead to disputes. Taking a case from the Insurance Complaints Bureau's 2020/21 annual report as an example, as detailed in this case, the complainant was admitted to a private hospital for a sleep test and was ultimately diagnosed with mild sleep apnea. The insurance company learned that the complainant had a snoring issue (a symptom of sleep apnea) which existed prior to the application, but this was not disclosed in the insurance application form. Consequently, the insurance company rejected the hospitalisation claim on the grounds that the complainant failed to disclose material facts.

The complainant lodged a complaint with the Insurance Complaints Bureau, and the Complaints Panel noted that the attending doctor stated the symptoms related to the complainant's sleep apnea only appeared after the policy came into effect. Since snoring during sleep is a common phenomenon, and the complainant had never sought medical attention for snoring issues before the policy was effective, the Complaints Panel did not consider the snoring to be an undiagnosed symptom that needed to be declared in the application form. Therefore, the panel ruled in favour of the complainant, and the insurance company was required to provide compensation.

However, the general public is required to disclose material facts with the utmost good faith. Under the Voluntary Health Insurance Scheme, there are underwriting questionnaire clauses (Note 1) which state that "each policyholder and insured person has the responsibility to answer questions and disclose material facts as required by the questions." However, if the insurance application documents do not include any relevant questions, it will be deemed that the company has waived the policyholder's and insured person's responsibility to disclose the required information. In other words, if the questions set by the insurance company are ambiguous and fail to guide the policyholder and insured person to disclose material facts, the responsibility lies with the insurance company.

It is worth noting that many high-end voluntary health insurance plans have now raised their standards to the highest level, with the waiting period for "pre-existing conditions unknown at the time of application" mostly reduced to 30 days or even shorter. However, some mid-to-low-end voluntary health insurance plans still adhere to the most basic terms set by the Voluntary Health Insurance Scheme. Policyholders are advised to carefully read the policy terms and conditions to minimise potential disputes.

This article only discusses one of the clauses of Voluntary Health Insurance. In fact, Voluntary Health Insurance products offer a wide range of coverage, including different ward categories and coverage areas. Before purchasing, readers are advised to compare options from multiple providers based on their personal needs. You are welcome to use 10Life's Insurance Decoder for a deeper understanding.

Further Reading: Insurance Intermediary Oversight: Customer Fails to Disclose "Material Facts", Medical Insurance Claim Unsuccessful

Note:
1. Clause 8 of the Policy Terms and Conditions in the "Voluntary Health Insurance Scheme Certified Product Policy Template (Revised July 2020)".
2. The above information is provided by 10Life, updated as of 4 July 2022, and is for reference only. It is not a sales proposal.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.