What Is a Pre-Existing Condition? A Simple Guide for New Zealand Insurance Applications

Insurance applications ask a lot of questions about your health, medical history and lifestyle. One phrase that often causes confusion is "pre-existing condition." What is a pre-existing condition and why is it so important to understand.

Insurance applications ask a lot of questions about your health, medical history and lifestyle. One phrase that often causes confusion is "pre-existing condition." What is a pre-existing condition and why is it so important to understand.

Most people assume it only refers to serious illnesses. In reality, it's much broader than that. A pre-existing condition isn't about how serious something is. It's about whether it existed before you applied for insurance. Understanding what insurers mean by a pre-existing condition - and how to answer medical questions accurately - will make the application process smoother as well as claims.

What is a pre-existing condition?

In plain English, a pre-existing condition is any illness, injury, symptom or medical condition that existed before your insurance cover started. That doesn't necessarily mean you've been diagnosed with a chronic illness. It doesn't mean recent, or ongoing, or right now, it can mean, ever.

It could include something you've, seen a GP about, had tests or scans for, received treatment or medication for, been referred to a specialist about or experienced symptoms of, even if no formal diagnosis has been made.

Every insurer defines pre-existing conditions slightly differently, so it's important to read the wording in the application and policy documents. The questions are usually quite specific, and they're designed to help the insurer understand the level of risk they're taking on. Your adviser will be able to help with this.

Why do insurers ask about them?

Insurance works by protecting against future uncertainty. If someone already knows they have a medical condition before taking out cover, that isn't an unknown risk. Insurers need to understand existing health conditions so they can decide whether to offer cover as applied for, request more medical information, apply an exclusion for a particular condition, charge a higher premium, or even decline the application.This process is called underwriting.

Most people worry about the wrong thing. They assume that mentioning a medical condition means they'll automatically be declined. That's rarely how underwriting works.

Many New Zealanders obtain insurance despite having asthma, high blood pressure, diabetes, previous injuries, mental health conditions or a history of surgery. The outcome depends on the individual circumstances, how well the condition is managed, and the insurer's underwriting guidelines.

The practical reality is that the insurer can only assess a condition if they know about it. If they find out about it later it can put a claim and even the policy in jeopardy.

What if the condition has completely resolved?

People often assume that if they're "better now", they don't need to mention it. This is often not the case. Many application forms ask about medical conditions over a specific time period, for example, the last one, five or ten years. Some questions specify, "have you ever". The questions will specify certain illnesses, treatments and organs.

A broken ankle from ten years ago may be irrelevant, but not if it still causes pain, has metal wear or the injury required significant surgery. Diseases like melanoma, heart disease or certain neurological conditions will need to be disclosed regardless of when it occurred.

The application will specifically say what they are not interested in, for example common cold, normal pregnancy, short or long sighted, contraception, etc.

This is why it's important to answer the actual question being asked, rather than making assumptions about what matters. Even if the GP has said, "Don't worry about it". The GP can update their opinion, an insurer can't change the policy. If a client asks me should I include that, the answer is always yes. Second guessing an underwriter is one way that claims fail.

What is non-disclosure?

Non-disclosure simply means that relevant information wasn't provided during the application process. Sometimes that's deliberate. More often, it's accidental.

People genuinely forget things or make assumption. They don't think an old knee operation matters. Perhaps they forget a short course of antidepressants several years ago. They assume a condition wasn't serious enough to mention. Insurance applications are completed only occasionally in most people's lives, so it's understandable that details can be overlooked.

The key is making a genuine effort to provide complete and accurate information. The apps that many GP surgeries provide, like Manage My Health, can be invaluable.

Why does disclosure matter?

When you make a claim, insurers may review the information provided when you first applied. They will also ask for medical notes relating to the claim. If they discover important medical information wasn't disclosed, they'll consider whether knowing that information would have changed their underwriting decision.

Depending on the circumstances and after the underwriting review they may assess the claim differently. They can apply policy terms that would have existed had the information been disclosed, reduce or decline a claim if the missing information was material to the insurer's decision, or even cancel the policy from inception.

This isn't about catching people out. It's about ensuring the insurance contract reflects the information both parties had when the policy was established. Providing accurate information from the outset gives everyone confidence that the policy will work as expected if it's ever needed.

If insurers gave all applicants a policy without disclosure people would wait until they were ill to apply, premiums would be unaffordable and those that were honest would suffer.

Practical tips to avoid accidental non-disclosure

The good news is that avoiding non-disclosure is usually straightforward.

i) Rather than trying to remember everything from memory on the spot, take a little time before completing the application.

ii) Review your recent medical history, including GP visits, prescriptions, specialist appointments and hospital treatment. Looking through your patient portal or medication history can be surprisingly helpful.

iii) If you're unsure whether something is relevant, mention it. More often than not the answer from an adviser will be to mention it. Better safe than sorry.

iv) It's generally easier for an insurer to decide something isn't important than it is to explain later why it wasn't disclosed.

v) Don't try to interpret the underwriting questions yourself. If a question isn't clear, ask your adviser to explain what they're looking for.

vi) Answer the questions honestly and completely, even if the condition feels minor or embarrassing. Mental health treatment, recurring aches, investigations that didn't find anything serious and medications you've stopped taking can all be relevant depending on the wording of the application.

Honesty and completeness usually wins.

How an adviser can help

One of the less obvious benefits of working with an adviser isn't simply choosing a policy. It's helping you navigate the application process.

An experienced adviser knows which questions typically need further explanation, what information underwriters are likely to request, and how to present your medical history clearly, accurately and in the best possible light.

That doesn't guarantee a particular outcome, but it can make the process smoother and reduce the risk of misunderstandings.

The bottom line

A pre-existing condition isn't automatically a barrier to getting insurance. It's simply part of the information insurers use to assess an application fairly.

The important thing isn't trying to guess what matters. It's providing honest, complete answers so the insurer has an accurate picture of your health when deciding on your cover.

Insurance is one of those things you hope you never need. But if the time comes to make a claim, having completed your application carefully gives you confidence that the policy reflects the information you provided from the start.

Frequently Asked Questions

Does a pre-existing condition mean my insurance won't be approved?

No. Many people with existing medical conditions are offered insurance. The outcome depends on the condition itself, your overall health, and the insurer's underwriting assessment.

What if I genuinely forgot to mention something?

If you realise you've omitted information after submitting an application, contact your adviser or insurer as soon as possible. It's easier to update information early than after a claim arises.

Do insurers check my medical records?

With your consent, insurers may request medical information from your GP or specialist if they need more detail during underwriting or when assessing a claim.

What if I'm still waiting for test results?

Tell the insurer if the application asks about investigations or pending referrals. They will wait for the results before making a decision or assess the application once more information is available.

Is an old sports injury a pre-existing condition?

Yes, but depending on the questions being asked and whether you've received treatment, ongoing care or continue to experience symptoms will determine if it must be disclosed.

Cover Yours Ltd (FSP769531) and Marc Hamilton (FSP306046) are registered Financial Service Providers and you can search the register here. Marc Hamilton is a member of the FSCL Disputes Resolution Service. Cover Yours Ltd and Marc Hamilton’s disclosures can be found here or by emailing marc@coveryours.co.nz