Exclusion: Pre-existing condition

The pre-existing condition exclusion is one of the most important details of your insurance policy but is rarely fully understood.

Definition: For the purposes of an insurance policy, a pre-existing condition is a personal illness or medical condition that exists prior to the effective date of your insurance coverage.

This definition is widely understood and policy holders are generally very careful to understand if or how they might be covered in event of an illness that may be considered a pre-existing condition. Using a straightforward example, if you have recently suffered a heart attack and choose to travel and buy travel insurance, most policies will exclude heart-related emergency and medical costs.

What is not well understood is how “prior to the effective date of the coverage” can play an important role in the coverage. The following are some examples where the effective date can have an impact on your insurance coverage:

  • You are planning a trip six months from now. Once the details are finalized, you also buy your insurance coverage. Your application includes your medical status at that time. If in the six months leading up to your trip, your medical situation changes, it may be considered a pre-existing condition since the effective date of your medical coverage only begins on your departure.
  • You buy an annual travel policy for which you plan to take three trips in the next 12 months. Between your first and second planned trip your medical condition changes. Even though you have an “annual” travel policy, for the purposes of this exclusion, each trip represents a new effective date. You might not have had a pre-existing condition during your first trip, but you do on your second.
  • You have a group benefits plan that provides coverage for 60 days out-of-country but your trip will last 75 days. You purchase a separate travel insurance policy to extend your coverage for the final 15 days of your trip. While away, within the first 60 days, you suffer an accident or illness requiring medical care. This change in your medical condition becomes a pre-existing condition for your extension policy.

There are some exceptions, but generally, the policy will exclude costs related to pre-existing conditions. Before you buy your policy, you not only need to understand if you have excluded medical conditions now, but you also need to know that if your medical situation changes in the future, how it might affect your coverage.