The “Pre-Existing Disease” Label in Health Claims: Medical Causation, Disclosure and the Risk of Overbroad Rejection

The “Pre-Existing Disease” Label in Health Claims: Medical Causation, Disclosure and the Risk of Overbroad Rejection

Introduction

Health insurance is intended to protect policyholders against the financial consequences of illness, hospitalisation and medical treatment. Yet disputes frequently arise when an insurer relies upon a policyholder’s previous medical history while assessing a claim. One of the most significant grounds cited in such disputes is the existence or alleged non-disclosure of a pre-existing disease (PED).

The expression “pre-existing disease” may appear straightforward, but its application can involve several distinct questions. Was the condition diagnosed before the policy commenced? Was medical treatment or advice received for it? Was the condition disclosed in the proposal form? Was the information material to the insurer’s decision to accept the risk? Did the policy contain a waiting period or exclusion applicable to that condition? Most importantly, is there a sufficient connection between the alleged pre-existing condition and the medical event for which the claim has been made?

These questions matter because medical history and medical causation are not necessarily the same thing. A person may have a previous medical condition without that condition necessarily being the cause of every later illness or hospitalisation. Similarly, a failure to mention a medical fact may have different legal consequences depending upon the nature of the question asked, the policy wording, the insured’s knowledge and the materiality of the information.

The regulatory framework has attempted to bring greater clarity to this area. The IRDAI (Insurance Products) Regulations, 2024 define a pre-existing disease, for health insurance purposes, by reference to a condition, ailment, injury or disease diagnosed by a physician, or for which medical advice or treatment was recommended or received, within 36 months before commencement of the policy. The regulations also provide that the waiting period for disclosed pre-existing diseases shall not exceed 36 months of continuous coverage. �

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At the same time, Indian courts have recognised the importance of honest disclosure in insurance contracts. The Supreme Court’s decision in Satwant Kaur Sandhu v. New India Assurance Co. Ltd. demonstrates that deliberate suppression of material medical information known to the insured can justify repudiation. �

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However, the Supreme Court’s later decision in Manmohan Nanda v. United India Assurance Co. Ltd. illustrates why the mere presence of a medical history cannot always be treated as sufficient by itself. The Court examined whether the alleged condition had actually been established, whether it was known to the insured and whether the insurer could rely on it to reject the particular claim. �

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The legal issue, therefore, is not simply whether a policyholder had a medical condition before purchasing insurance. It is whether the contract, disclosure, evidence and applicable regulatory framework together justify the insurer’s decision in the particular case.

1. What Is a Pre-Existing Disease?

The starting point is the regulatory definition.

Under the IRDAI (Insurance Products) Regulations, 2024, a pre-existing disease means any condition, ailment, injury or disease:

diagnosed by a physician not more than 36 months before commencement of the policy; or

for which medical advice or treatment was recommended by, or received from, a physician during that 36-month period.

The regulations also provide that the PED definition does not apply to overseas travel policies. �

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This definition is significant because it provides a regulatory framework for identifying what may constitute a PED. It does not mean that every medical event in a person’s lifetime automatically becomes a permanent exclusion from insurance coverage.

For example, if an individual was treated for a particular condition several years before purchasing a policy and no longer receives treatment or medical advice for that condition, its relevance must be assessed under the applicable policy terms and regulatory framework.

On the other hand, if an individual was diagnosed with a disease shortly before obtaining insurance and was receiving treatment for it, the condition may fall within the PED framework.

The distinction becomes particularly important when an insurer relies on a PED exclusion to deny a claim.

2. A Pre-Existing Disease Is Not Automatically a Permanent Exclusion

The existence of a PED does not necessarily mean that a person can never obtain health insurance coverage for that condition.

The 2024 regulatory framework provides that the waiting period for disclosed pre-existing diseases may extend up to 36 months of continuous coverage. The regulations also require insurers to endeavour to offer products catering to persons with existing medical conditions. �

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This means that the legal effect of a PED may depend upon the particular policy.

A policy may provide:

a waiting period for the PED;

an exclusion for a particular condition;

coverage after completion of the applicable waiting period; or

other contractual limitations.

Therefore, the question should not simply be:

“Did the insured have a previous disease?”

The more precise question is:

“Does the particular disease fall within the applicable policy’s PED clause or waiting period, and does that provision apply to the claim in question?”

This contractual distinction is essential when examining the validity of a claim rejection.

3. Medical History Is Not the Same as Medical Causation

One of the central issues in PED disputes is the distinction between medical history and medical causation.

A medical history may show that an insured previously suffered from a condition. Medical causation asks a different question: What caused or contributed to the illness or medical event for which the claim has been submitted?

Consider a simple example.

A person had diabetes before obtaining a health-insurance policy. Two years later, the person suffers an accidental fracture and is hospitalised for treatment.

The existence of diabetes may be relevant to the person’s medical history. However, it does not automatically follow that the fracture treatment is a claim for treatment of diabetes or that diabetes caused the accident.

The insurer would therefore need to examine the actual policy wording and the circumstances of the claim rather than treating the mere existence of diabetes as automatically determinative.

The Supreme Court’s judgment in Manmohan Nanda v. United India Assurance Co. Ltd. is particularly relevant to this distinction.

In that case, the insured had disclosed diabetes. The insurer later relied on hyperlipidaemia and related medical circumstances while repudiating a claim arising from a cardiac event. The Supreme Court examined whether the alleged pre-existing condition had actually been established and whether the insurer had sufficient grounds to rely upon it. The Court ultimately interfered with the repudiation. �

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The case demonstrates an important principle for analysing PED disputes: the existence of a medical fact must be distinguished from proof that the fact falls within the relevant exclusion and justifies rejection of the particular claim.

4. The Duty of Disclosure: Why It Matters

Insurance contracts are based upon the principle of uberrimae fidei, or utmost good faith.

This requires the parties to provide material information relevant to the insurance contract. For a policyholder, this may include answering questions about previous diseases, treatment, hospitalisation, medication or medical advice.

The Supreme Court’s decision in Satwant Kaur Sandhu v. New India Assurance Co. Ltd. is an important authority on this issue.

In that case, the insured had answered questions concerning his state of health and previous illness in a manner that the Court found to involve suppression of material facts. The medical history included diabetes and chronic renal failure, and the Court concluded that the information was material to the mediclaim contract. The insurer was therefore justified in repudiating the claim. �

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The decision illustrates that a policyholder cannot deliberately conceal a material medical condition that is specifically asked about in the proposal form and later expect the insurer to ignore that concealment.

However, the principle of disclosure should not be understood to mean that every omission concerning every minor medical event automatically amounts to fraudulent or material non-disclosure.

The circumstances matter.

5. What Makes a Medical Fact “Material”?

A material fact is generally one that would influence a prudent insurer in deciding whether to accept the risk or on what terms.

The importance of this principle becomes clear when examining a proposal form.

Suppose an insurer specifically asks:

“Have you ever been diagnosed with diabetes?”

If an applicant knows that they have diabetes but deliberately answers “No”, the non-disclosure may be material.

However, a broad question such as:

“Have you ever suffered from any illness?”

may raise more complicated issues if interpreted as requiring disclosure of every minor illness the person has experienced throughout life.

This problem was discussed in Manmohan Nanda, where the proposal form contained broad questions concerning previous illness. The judgment considered the argument that failure to answer every broad medical-history question could not automatically be treated as suppression or misrepresentation. �

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The drafting of the proposal form therefore matters.

A dispute may turn upon:

the exact wording of the question;

what the insured actually knew;

whether the condition had been diagnosed;

whether treatment or medical advice had been received;

whether the information was material to underwriting; and

whether the alleged non-disclosure falls within the policy’s PED provisions.

6. The Insurer’s Underwriting Role

The duty of disclosure does not exist in isolation.

The insurer also has an underwriting function. Before issuing a policy, the insurer may ask medical questions, request medical records or require medical examinations depending on the product and underwriting process.

This becomes important when the insurer had information concerning the insured’s health before accepting the policy.

In Manmohan Nanda, the Supreme Court considered the fact that the insured had disclosed diabetes and had undergone medical evaluation before the policy was issued. The Court examined the insurer’s own assessment of the risk before subsequently relying upon alleged non-disclosure. �

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This does not mean that an insurer can never repudiate a claim following medical examination. Rather, it highlights the importance of examining what information was available to the insurer when the contract was entered into and what the insurer subsequently relied upon when repudiating the claim.

The underwriting process and the claims process should therefore be considered together when determining whether the rejection is contractually justified.

7. When Can a Claim Be Rejected on the Ground of a Pre-Existing Disease?

A claim may be affected by a PED where the applicable policy terms and regulatory framework support such exclusion or waiting period.

Relevant factors may include:

7.1 The condition existed within the applicable PED period

The condition must fall within the applicable regulatory and contractual definition.

7.2 The condition was subject to a waiting period

If a disclosed PED is still within the applicable waiting period, treatment falling within the exclusion may not be payable.

7.3 The policy contains a relevant exclusion

The insurer must rely upon the actual contractual provision applicable to the claim.

7.4 There was material non-disclosure or misrepresentation

Where the policyholder knowingly withheld material medical information, the consequences can be significant.

7.5 The evidence supports the insurer’s position

The insurer’s decision should be based upon the available medical and contractual material rather than merely attaching the label “pre-existing disease” to the claim.

8. The Risk of Overbroad Rejection

The phrase “pre-existing disease” can become problematic when used as a broad label without examining the individual circumstances of the claim.

An insurer may identify an old medical condition and then treat that condition as sufficient reason to reject a later claim. But several additional questions may remain:

Was the condition actually diagnosed?

Was the insured aware of it?

Was treatment or medical advice received?

Was it disclosed?

Was the condition covered by a waiting period?

Was the waiting period still running?

Does the exclusion actually apply to the treatment claimed?

Is there medical evidence supporting the insurer’s interpretation?

Does the policy wording clearly support repudiation?

These questions are especially important because health-insurance disputes often involve complex medical facts.

For example, a person with hypertension may later undergo treatment for an unrelated injury. The insurer cannot simply assume that the existence of hypertension answers the entire claim. The medical records, policy wording and nature of the treatment would have to be examined.

The point is not that an insurer must pay every claim merely because a previous medical condition exists. Rather, the rejection should correspond to the actual contractual exclusion and the evidence supporting its application.

9. Importance of Clear Policy Wording

Insurance policies are contracts. The policyholder’s rights and the insurer’s liabilities are therefore substantially determined by the terms agreed between them.

An exclusion clause should be read in the context of the policy as a whole.

The Supreme Court in Manmohan Nanda considered the interpretation of insurance exclusions and relied upon the principle that ambiguous exclusionary provisions may be interpreted against the insurer in appropriate circumstances. �

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This does not mean that courts automatically interpret every disputed clause in favour of the policyholder. Rather, the precise language of the contract remains crucial.

For this reason, policyholders should pay particular attention to:

the definition of PED;

the duration of the waiting period;

permanent exclusions, if any;

specific disease exclusions;

disclosure requirements;

co-payment provisions;

sub-limits; and

claim documentation requirements.

10. The 2024 IRDAI Framework and the 36-Month Waiting Period

The IRDAI (Insurance Products) Regulations, 2024 introduced an important framework for health-insurance products.

Under the regulations:

a PED is linked to diagnosis, medical advice or treatment within the preceding 36 months;

the waiting period for disclosed PEDs cannot exceed 36 months of continuous coverage;

insurers are required to endeavour to offer products catering to persons with existing medical conditions; and

a 60-month moratorium period applies to contestability of policies and claims on grounds of non-disclosure or misrepresentation, except in cases of established fraud, subject to the regulatory framework and applicable circumstances. �

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The 60-month moratorium is particularly important because it demonstrates that the regulatory framework does not contemplate unlimited contestability of a health-insurance policy based on non-disclosure or misrepresentation.

However, the moratorium should not be confused with the PED waiting period.

They perform different functions:

Issue

PED waiting period

Moratorium period

Main purpose

Determines when certain disclosed PED-related treatment becomes covered

Limits contestability after continuous coverage

Period under 2024 framework

Up to 36 months

60 continuous months

Focus

Coverage of PED-related treatment

Contestability based on non-disclosure/misrepresentation

Exception

Subject to policy/regulatory terms

Established fraud remains relevant

This distinction is important because the two concepts are sometimes incorrectly treated as interchangeable.

11. Claim Repudiation Must Be Properly Communicated

A claim rejection should not merely state that the claim is “not admissible” or that the insured has a “pre-existing disease.”

IRDAI’s health-insurance guidance states that where a claim is denied or repudiated, the insurer’s communication should specifically state the reasons for denial or repudiation and refer to the corresponding policy conditions. The communication should also provide information regarding the available grievance-redressal mechanism and Insurance Ombudsman. �

IRDAI

This requirement is significant because it allows the policyholder to understand why the claim has been rejected.

A properly reasoned repudiation should therefore enable the policyholder to identify:

the alleged medical condition;

the relevant policy provision;

the applicable exclusion or waiting period;

the factual basis relied upon by the insurer; and

the available grievance mechanism.

A vague rejection can make it difficult for the policyholder to meaningfully challenge the decision.

12. Medical Evidence and the Role of Causation

Medical evidence can become decisive in PED disputes.

The relevant records may include:

previous prescriptions;

diagnostic reports;

hospital records;

consultation notes;

medical history;

laboratory reports;

discharge summaries;

treatment records; and

medical opinions obtained during claim assessment.

The purpose is not merely to identify whether a disease existed. The records may also help establish whether the alleged condition was known to the insured and whether it has a medically relevant connection with the treatment for which the claim was submitted.

This is where medical causation becomes important.

For example:

Situation A:

An insured previously received treatment for gastritis and later suffers an accidental fracture.

Situation B:

An insured was diagnosed with a cardiac condition, continued receiving treatment for it and later underwent hospitalisation for the same cardiac condition during a PED waiting period.

The relevance of the previous condition is materially different in the two situations.

The legal assessment therefore requires more than a simple search of the insured’s medical history.

13. Two Supreme Court Decisions Illustrating the Difference

A. Satwant Kaur Sandhu v. New India Assurance Co. Ltd. — 2009

In Satwant Kaur Sandhu, the Supreme Court dealt with suppression of material medical information in a mediclaim proposal.

The insured had answered questions concerning his health and previous illness in a manner the Court found to be materially untrue. The Court found clear suppression of material facts and upheld the insurer’s repudiation. �

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Significance

The case establishes the importance of honest disclosure of material medical information.

It demonstrates that where an insured knowingly suppresses a significant medical condition that was material to the insurance contract, repudiation may be justified.

B. Manmohan Nanda v. United India Assurance Co. Ltd. — 2021

The Supreme Court’s decision in Manmohan Nanda provides a useful counterpoint.

The insured had disclosed diabetes and had undergone medical evaluation before the insurer issued the policy. The insurer later relied upon alleged hyperlipidaemia and related circumstances in repudiating a claim arising from a cardiac event.

The Supreme Court examined whether hyperlipidaemia had actually been established as a pre-existing condition known to the insured and whether the insurer could rely upon the alleged non-disclosure in the circumstances. The Court ultimately allowed the appeal and interfered with the repudiation. �

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Significance

The case demonstrates that:

The existence of a medical history does not, by itself, answer whether a particular claim falls within a PED exclusion.

The circumstances of disclosure, the insurer’s underwriting process, the policy language and the medical evidence all matter.

14. What Should Policyholders Do When a Claim Is Rejected?

A policyholder receiving a repudiation based on a PED should not rely solely on a verbal explanation.

The policyholder should first obtain the written repudiation letter.

The following documents should then be examined:

1. Policy document

Check the exact definition of PED and relevant exclusions.

2. Proposal form

Check what medical questions were actually asked and what answers were provided.

3. Customer Information Sheet

Check whether exclusions and waiting periods were explained.

4. Medical records

Collect previous prescriptions, diagnostic reports, hospital records and treatment documents.

5. Repudiation letter

Identify the precise reason relied upon by the insurer and the corresponding policy clause.

6. Grievance mechanism

Use the insurer’s internal grievance process and, where applicable, the Insurance Ombudsman mechanism.

IRDAI’s guidance specifically directs policyholders towards the insurer’s grievance-redressal mechanism and the Insurance Ombudsman where applicable. �

IRDAI

15. A Practical Test for Examining PED-Based Repudiation

A useful way to analyse a disputed claim is through a series of questions:

First: Is there evidence that the alleged disease or condition existed within the applicable PED period?

Second: Was the condition diagnosed, treated or medically advised upon?

Third: Did the insured know about the condition when the policy was purchased?

Fourth: Was the condition disclosed in the proposal form?

Fifth: What exactly does the policy say about the condition?

Sixth: Is a waiting period applicable?

Seventh: Has the waiting period expired?

Eighth: Does the exclusion actually apply to the treatment or hospitalisation claimed?

Ninth: What medical evidence supports the insurer’s conclusion?

Tenth: Does the repudiation letter identify the specific contractual basis and reasons for rejection?

This approach prevents the dispute from being reduced to the single phrase “pre-existing disease.”

16. The Balance Between Policyholder Protection and Insurance Underwriting

The issue should not be viewed as a conflict in which one side must always be presumed correct.

Insurers require accurate medical information to assess risk and price insurance products. Deliberate concealment of material medical facts can affect the insurer’s decision to accept a proposal and therefore has legitimate contractual consequences.

At the same time, policyholders require predictable coverage and should be able to understand why a claim has been rejected.

The regulatory framework attempts to address both interests by defining PEDs, regulating waiting periods, requiring appropriate product design and providing mechanisms for claim and grievance handling. �

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The resulting legal question is therefore one of contract, evidence and regulatory compliance, rather than simply whether the policyholder has ever suffered from an illness.

17. Conclusion

The phrase “pre-existing disease” should not become a substitute for a proper analysis of a health-insurance claim.

A policyholder’s previous medical history can be highly relevant. Where an insured knowingly suppresses a material condition, the insurer may have legitimate grounds to rely upon the non-disclosure, as demonstrated by Satwant Kaur Sandhu. �

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However, the existence of a previous medical condition does not necessarily establish that every subsequent medical event falls within a PED exclusion. Manmohan Nanda illustrates the importance of examining the insured’s knowledge, the information available to the insurer, the policy wording and the medical basis for the repudiation. �

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The current IRDAI framework provides further structure by defining PEDs, limiting the waiting period for disclosed PEDs to a maximum of 36 months and providing a 60-month moratorium framework concerning contestability on grounds of non-disclosure or misrepresentation, subject to established fraud and the applicable regulatory conditions. �

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Ultimately, a fair assessment of a PED-based claim should answer three connected questions:

What was the medical condition?

What did the policyholder know and disclose?

Does the policy and the available medical evidence actually justify applying the exclusion to the claim?

A careful distinction between medical history, disclosure and causation can therefore help prevent both unjustified claim rejection and unsupported challenges to legitimate insurance exclusions.

FAQs

1. What is a pre-existing disease in health insurance?

Under the IRDAI (Insurance Products) Regulations, 2024, a PED generally refers to a condition, ailment, injury or disease diagnosed, or for which medical advice or treatment was recommended or received, within 36 months before commencement of the policy. �

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2. Does having a pre-existing disease mean that health insurance will not cover me?

Not necessarily. Insurers may offer products covering persons with existing medical conditions. A disclosed PED may be subject to a waiting period according to the policy, subject to the regulatory maximum of 36 months for health insurance. �

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3. Can an insurer reject a claim because the policyholder did not disclose a disease?

Yes, non-disclosure of a material medical fact can have contractual consequences. In Satwant Kaur Sandhu, the Supreme Court upheld repudiation where material medical information had been suppressed. �

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4. Can an insurer reject every claim merely because the insured had a previous illness?

The existence of a previous illness does not by itself answer whether the particular claim falls within a PED exclusion. The policy wording, disclosure, waiting period and medical evidence must be examined.

5. What is the difference between a PED and a waiting period?

A PED describes a medical condition falling within the applicable regulatory and contractual definition. A waiting period determines the period during which specified treatment relating to that condition may not be covered.

6. What is the moratorium period in health insurance?

Under the 2024 regulatory framework, after 60 continuous months of coverage, a health-insurance policy and claim are generally not contestable by the insurer on grounds of non-disclosure or misrepresentation, except on grounds of established fraud, subject to the applicable regulatory conditions. �

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7. What should I do if my health-insurance claim is repudiated for a PED?

Obtain the written repudiation letter, check the relevant policy clause, review the proposal form and medical records, and use the insurer’s grievance-redressal mechanism. Where applicable, the Insurance Ombudsman mechanism may also be available. �

IRDAI

8. What is medical causation in a health-insurance dispute?

Medical causation concerns the relationship between a medical condition and the illness, injury or treatment for which the claim is made. A previous medical condition does not necessarily establish that it caused every later medical event.

CASE LAWS TO INCLUDE

1. Satwant Kaur Sandhu v. New India Assurance Co. Ltd.

(2009) 8 SCC 316

Principle: Suppression of material medical facts known to the insured can justify repudiation of an insurance contract. �

Indian Kanoon

2. Manmohan Nanda v. United India Assurance Co. Ltd.

2021

Principle: The applicability of a PED exclusion must be examined in light of the actual medical evidence, the insured’s knowledge and disclosure, the insurer’s underwriting process and the policy terms. �

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3. Canara Bank v. United India Insurance Co. Ltd.

(2020) 3 SCC 455

Relevance: Important for interpretation of insurance contracts and the treatment of suppression/misrepresentation issues; it was also considered in Manmohan Nanda. �

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PRIMARY LEGAL / REGULATORY SOURCES

IRDAI (Insurance Products) Regulations, 2024 — particularly provisions concerning PED, waiting periods and moratorium. �

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IRDAI Master Circular on Health Insurance Business, 29 May 2024 — IRDAI/HLT/CIR/PRO/84/5/2024. �

IRDAI

IRDAI Health Insurance guidance/FAQ concerning PEDs, waiting periods and claim repudiation. �

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Satwant Kaur Sandhu v. New India Assurance Co. Ltd., (2009) 8 SCC 316. �

Indian Kanoon

Manmohan Nanda v. United India Assurance Co. Ltd., Supreme Court, 6 December 2021. �

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