How Critical Illness Survivors Can Navigate Insurance Bias And Secure Fair Coverage

People who recover from serious illnesses often find that their medical history continues to shadow them when they apply for insurance. Despite being declared healthy, they are frequently marked as "high-risk," which translates into higher premiums, restricted cover, or even outright rejection.

We look at why such practices remain common, where regulation falls short, and what options are available to consumers seeking fair treatment.

Understanding The Insurance Bias Against Critical Illness Survivors

Bias often happens due to the way underwriting systems access risk. Insurers heavily rely on medical history to predict the probability of future claims. However, it does not necessarily mean that someone who has recovered will again fall ill. So, recovered survivors often face a regulatory grey area. 

"Whenever an individual recovers from a serious illness, there is always a chance of re-occurrence of such illness and their immune system also becomes weak, so they come under the category of higher risk and normally insurers reject such proposals or accept with some loading on premium or some clause or waiting period," says Surender Tonk, vice president, Insurance Brokers Association of India (IBAI).

The Role Of Regulations And Insurer Guidelines In Risk Assessment

"Regulators don't intervene in these cases as insurers have guidelines for such cases, and it is always suitable for the client if they take the coverages at a younger age, then there is no hassle in renewals," says Tonk. The underwriting becomes tough for such cases, but still, the client has the option to choose.

"Irdai prohibits policy denial for pre-existing conditions, but it does allow for up to a four-year waiting period for pre-existing illness and policy premiums based on past diseases. So, insurers use these provisions to impose cost on applicants to compensate for the increased possibility of frequent claims by using their policy underwriting process," says Abhishek Kumar, a Securities and Exchange Board of India (Sebi)-registered investment advisor (RIA), and founder and chief investment advisor of SahajMoney, a financial planning firm. However, in 2024, Irdai reduced the waiting period for specific diseases from four years to three years.

Taking Action: How Survivors Can Challenge Insurance Decisions

The insured can request the insurer to provide a detailed explanation for the rejection and provide medical fitness certificates to the insurer as supporting documents. If they are not satisfied with the insurer's response, then they can file an appeal through their grievance redressal mechanisms. "Afterwards, they can escalate it to the Insurance Ombudsman for redressal, and if that too doesn't lead to a satisfactory solution, they can approach the consumer court for unfair practices," says Kumar.