Pre-existing Condition
What Does Pre-existing Condition Mean?
A pre-existing condition is a medical issue that a person has before entering into an insurance contract. In other words, it refers to a known health condition or personal ailment that exists at the time the insurance contract is signed. An insurance company needs to be informed of these conditions.
Insuranceopedia Explains Pre-existing Condition
Pre-existing conditions are among the factors that actuaries consider when calculating the premium a policyholder must pay. These conditions are defined in two ways. The “objective standard” definition includes any condition for which a patient has previously sought medical advice or treatment before purchasing the insurance policy. In contrast, the “prudent person” definition includes any medical condition for which a reasonable person would have sought advice or treatment.
Generally, insurance companies do not cover pre-existing conditions, as they existed before the contract period. However, under the Affordable Care Act, health insurance companies are required to offer coverage to individuals with pre-existing conditions.
A pre-existing condition may also apply to other types of insurance beyond health or life insurance. For example, fire insurance may refer to a prior history of fires.
Failure to disclose a pre-existing condition may be grounds for the cancellation of the insurance contract and could prevent a policyholder from receiving claims and benefits.
