Pre-existing Condition

Definition - What does Pre-existing Condition mean?

A pre-existing condition is medical condition that a person has before they enter into an insurance contract. In other words, it refers to a health condition or a personal ailment known and in existence at the time the insurance contract is executed. It is vital for an insurance company to be aware or informed of these conditions.

Insuranceopedia explains Pre-existing Condition

Pre-existing conditions are among the factors considered by actuaries who compute the premium to be paid by the policyholder. They are defined in two ways. One is called the “objective standard” definition. This refers to any condition that a patient has sought medical advice or treatment for prior to purchasing the insurance policy. On the other hand, the “prudent person” definition refers to any medical condition any prudent person would have sought advice or treatment for.

Normally, insurance companies do not cover pre-existing conditions as they were acquired before the period of the contract. However, under the Affordable Care Act, pre-existing conditions are no longer an issue. That is, health insurance companies are mandated to provide health insurance coverage even to those who have long had medical conditions or illnesses.

A pre-existing condition may also refer to other types of insurance other than health or life insurance. For instance, in procuring fire insurance policies, pre-existing conditions may also refer to past records of fire.

The concealment of a pre-existing condition may constitute valid grounds for the cancelation of the insurance contract and could prohibit a person from receiving claims and benefits.

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