Definition
Pre-Existing Disease (PED)
A pre-existing disease is any condition, ailment or injury diagnosed or treated before buying a health policy, typically subject to a waiting period.
IRDAI defines PED to include conditions diagnosed within a set period before policy inception or for which signs/symptoms existed. Health policies usually impose a PED waiting period (recently capped by IRDAI, with a maximum) before claims related to that condition are payable.
Declaring PEDs accurately in the proposal form is critical: non-disclosure is a leading cause of claim repudiation. After the moratorium period, insurers generally cannot reject claims citing undisclosed PEDs except in cases of established fraud, giving long-term policyholders greater certainty.
Related terms
- Waiting PeriodA waiting period is the time after a health policy starts during which claims for specified conditions or treatments are not payable.
- Moratorium PeriodThe moratorium period in health insurance is the span of continuous coverage after which an insurer cannot challenge a claim on grounds of non-disclosure or misrepresentation, except for proven fraud.
- Non-DisclosureNon-disclosure is the failure to reveal a material fact to the insurer, which can render a policy voidable or lead to claim rejection.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.