Switching Insurers: Are Pre-Existing Conditions Still Covered?
A health insurance premium increase can be a good reason to review your options. Before moving to a cheaper policy, however, check what would happen to cover for medical conditions you already have.
In New Zealand, switching insurers does not automatically transfer your existing underwriting terms. Whether a condition is covered under a new policy depends on the product, your medical information and the insurer’s written acceptance.
Why a covered condition may become pre-existing
A condition can develop after your current policy starts and qualify for cover under its terms.
Suppose a thyroid nodule was discovered several years after you first arranged health insurance. Related investigations or treatment may be covered by your current policy.
If you apply to another insurer, the nodule already exists at the time of that application. The new insurer may assess it as a pre-existing condition and offer different terms.
Similar benefit descriptions therefore do not necessarily mean equivalent cover for you.
A diagnosis is not the only consideration
Depending on the application questions and policy definitions, relevant medical information may include symptoms, abnormal test results, medication, specialist referrals and pending investigations.
Answer the application questions fully and accurately. If your health changes between applying and the new cover starting, contact the insurer or your adviser to confirm what information must be updated.
Can a transfer arrangement preserve cover?
Some products, employer schemes or specific arrangements may cover qualifying pre-existing conditions. Eligibility requirements, limits and exclusions still need to be checked.
A waiting-period waiver and acceptance of a pre-existing condition address different issues.
A waiver changes when a benefit can become available. Acceptance determines whether a particular existing condition is covered. One does not automatically establish the other.
Some products also cover certain pre-existing conditions after a specified period of continuous cover, while continuing to exclude others. Check the exact product terms.
What to confirm before cancelling
Obtain and review the new insurer’s formal written terms. Check:
Whether each relevant existing condition is covered.
Any medical exclusions and their scope.
Waiting periods and the precise terms of any waiver.
Excesses, benefit limits and optional benefits.
The confirmed policy start date.
How planned treatment and existing claims will be handled.
A quote shows a price. The final policy documents explain the cover being offered.
Keep your current policy in place while you establish and assess the proposed replacement. Cancellation should follow a clear understanding of the new terms and how the policies will connect.
Could you adjust your existing policy?
If affordability is the main concern, ask about changes to your current cover.
A higher excess may reduce premiums, but it increases the eligible costs you must fund yourself. Removing optional benefits may also reduce premiums while reducing cover.
Before making changes, ask whether lowering the excess, restoring benefits or upgrading later would require further medical assessment or new waiting periods. Changes within the same insurer can also affect existing entitlements.
Making the comparison
Switching may be suitable when the new policy meets your needs and its treatment of existing conditions is acceptable. Where lower premiums come with significant exclusions, assess whether the savings justify the change in protection.
One Step Finance can help you review your current policy and compare alternative premiums, benefits and underwriting terms.
This article provides general information, not personalised financial advice. Cover is subject to the relevant policy wording and the insurer’s written acceptance.