What is unknown pre-existing conditions? Can VHIS cover them?
What are Unknown Pre-existing Conditions?
“Unknown pre-existing conditions” refer to diseases that the insured was unaware of before applying for insurance, or that had no obvious signs or symptoms, or for which no medical consultation or treatment had been sought.
Pre-existing vs Unknown Pre-existing Conditions
The following is a frequently asked question:
Does VHIS Cover Unknown Pre-existing Conditions?
Traditional medical insurance generally includes an exclusion clause that refuses to cover “unknown/known pre-existing conditions” before the policy takes effect; whereas Voluntary Health Insurance Scheme (VHIS) conditionally provides coverage for “unknown pre-existing conditions” at the time of application.
In view of this, when the government launched the Voluntary Health Insurance Scheme , it required that the coverage must include unknown pre-existing conditions to provide customers with more comprehensive protection and reduce disputes in insurance claims.
According to the guidelines of the Voluntary Health Insurance Scheme , if the policyholder claims for unknown pre-existing conditions during the waiting period, the insurance company will compensate according to the situation. The waiting period is 3 policy years, with compensation rates of 0%, 25%, and 50% for the first 3 policy years, respectively.
| Compensation Rate for Unknown Pre-existing Conditions | |
| First Policy Year | No coverage |
| Second Policy Year | 25% of the benefit limit |
| Third Policy Year | 50% of the benefit limit |
| Fourth Policy Year | 100% of the benefit limit |
VHIS Standard Plan products on the market will provide compensation at no less than this level, and some Flexi Plan products have even more lenient waiting period conditions for unknown pre-existing conditions. Bowtie has reduced the waiting period for unknown pre-existing conditions to:
| Waiting Period (from the policy effective date) | Compensation Ratio^ |
| First 90 Days | 0% |
| Day 91 and Thereafter | 100% of the benefit limit |
- ^Applicable to Bowtie VHIS Flexi Plan and Bowtie Pink VHIS Plan .
Of course, some insurance companies in the market already provide full compensation for unknown pre-existing conditions in the first policy year. However, to reduce the possibility of abuse of this clause, Bowtie has set the waiting period for unknown pre-existing conditions to the first 90 days of the first policy year.
Claims Handling for Post-Policy Diagnoses
| Unknown Pre-existing Conditions at Time of Insurance | VHIS Standard Plan | Traditional Medical Insurance |
| Diagnosed within 3 months after the policy’s effective date | No compensation will be made, as the compensation rate is 0% during the waiting period in the first policy year | Generally no compensation |
| Diagnosed in the 3rd year after the policy’s effective date | Partial compensation will be made according to the 50% compensation rate in the 3rd policy year (during the waiting period) | Generally no compensation |
How Insurers Determine Unknown Pre-existing Conditions?
When customers apply for medical insurance, the insurance company requires them to fill out a questionnaire about their health status for underwriting purposes. The policyholder must truthfully disclose all known past medical history and current health conditions. The insurance company will make an underwriting decision based on the applicant’s health and medical history declaration.
When the insured later submits a claim, the insurance company needs to determine whether the insured’s physical condition or illness existed before the policy effective date (Pre-existing conditions) or is an “unknown pre-existing condition at the time of application.” The insurance company will judge whether the insured’s diagnosis falls under “unknown pre-existing condition at the time of application” based on the previously declared information and the most recent medical reports (doctor’s diagnosis results).
For example, certain conditions can be determined as pre-existing regardless of when they are discovered. The most obvious example is congenital diseases, which must have existed before the insurance application, such as congenital heart disease (including ventricular and atrial septal defects, commonly known as heart leakage ).
What Are the Consequences of Not Disclosing Pre-Existing Conditions?
As mentioned earlier, policyholders should disclose their health conditions and medical history truthfully to the best of their knowledge. Intentionally concealing information violates the “utmost good faith principle,” which may result in the policy adding exclusions , ” Premium Loading ” , becoming invalid , or leading to claim rejections in the future.
If the insurance company has doubts about a claim application, it has the right to request the insured’s medical records from public hospitals or private medical institutions. Therefore, the insurance company will not be unaware of the existence of “pre-existing conditions.”
What is the “Utmost Good Faith Principle”?
According to common law, commercial contracts must be entered into with good faith. Good faith is divided into general good faith and utmost good faith. General good faith means that all parties to the contract must provide true and non-fictitious information honestly. However, they have no duty to ensure that the other party obtains all “material” information.
Simply put, you must answer truthfully to the questions asked by the other party, but if they don’t ask, you don’t necessarily have to disclose all information, regardless of its importance.
However, insurance contracts are bound by the stricter utmost good faith principle. What does this mean? It means that you must disclose all material facts to the other party, regardless of whether they have asked about them.
What are material facts? They are any circumstances that could influence a prudent insurance company in setting premiums or deciding whether to accept the risk.
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