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Benefits payable for illness existing prior to policy upgrade

In February 2017, Ms. Ho purchased a hospital medical insurance plan with a maximum limit of HK$500,000 per year. In December 2017, she experienced back pain and was diagnosed with a prolapsed intervertebral disc. Her doctor advised that she might need an operation if her condition did not improve with medication. Anticipating the need for better protection in the future, Ms. Ho immediately upgraded her existing medical insurance plan upon renewal, with a higher maximum limit of HK$1,000,000 per year.

Unfortunately in March 2018, Ms. Ho experienced severe back pain again. She was admitted to hospital and an operation for the prolapsed intervertebral disc was performed. When Ms. Ho tried to claim her hospital expenses, she was informed by her insurance company that the maximum limit of hospital benefit payable would be HK$500,000.

Given that Ms. Ho had upgraded her medical insurance and had been paying a higher premium, why was the maximum benefit payable not the upgraded cover of HK$1,000,000?

At the time Ms. Ho upgraded her policy, she had already been diagnosed as suffering from a prolapsed intervertebral disc. This means that her prolapsed intervertebral disc was considered to be a pre-existing illness, i.e. prior to the policy upgrade. As pre-existing illnesses are excluded in the medical insurance policy, the upgraded benefit was not applicable to Ms. Ho’s operation in March 2018. The insurance company therefore paid her claim according to her benefit limit before the upgrade of the plan.

However, Ms. Ho can still enjoy the upgraded benefit for other illnesses which occur after her policy upgrade.

As we grow older, the risk of having illness gets higher. It is recommended to take out a medical insurance policy with a higher benefit level at an earlier stage of life. This will ensure that there will be enough coverage during retirement.

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