All you need to know about Exclusions in Your Health Insurance Policy?

Claim rejection is the most disappointing subject in a policy holder’s life. The customer starts loosing trust in the company and feels betrayed. They feel the company gives unrealistic reasons for rejecting their claims.

An insurance claim rejection results in a huge loss to customer, financially, because now they have to pay the medical expenses from their wallet. This usually happens to people who have less or no idea about what is included and excluded in their policy. To know the inclusions and exclusions, a policyholder should read the terms and conditions carefully.

Let’s understand what does a health insurance policy does not cover.

What are these exclusions?

In almost all cases, where claims are rejected, the main reason is lack of knowledge about the insurance  policy. The claims are usually refused depending upon the points mentioned in the policy documents.

Most of the time, policyholders don’t bother to read the terms and condition that explain in detail the inclusions and exclusions. There are various clauses like waiting period or exclusion of pre-existing illness, which customers do not fully understand and in some cases do not bother to know. They simply view a health insurance policy as a product that will pay their medical bills and other related expenses. This mindset lands them in a huge financial mess during the time of medical emergencies.

The below article is drafted to enlighten you about the 4 important exclusions that almost every health insurance company has. Read below to know the details about these exceptions.

1.            Pre-existing Illness

Nearly every company has this exclusion. Under this rule, most of the companies do not cover diseases that are already detected in the patient. Generally, pre-existing diseases are not covered for the initial few years (the exact years differ from company to company). For instance, if someone is suffering from kidney stone, then any medical expenses occurred due to kidney stone will not be covered for first few years.

This is the reason why it is said that one should buy health insurance as soon as possible, so that the initial few years are passed then you’ll be covered for a range of diseases.

2.            First 30-90 days waiting period

Nearly every  companies do not give cover for any treatment happened in 30-90 days of the policy taken, except medical expenses caused due to accident.

3.            Permanent Exceptions

Permanent exclusions mean a list of illnesses that are never covered in health insurance policy for whole life. They are excluded from the coverage list of nearly every health insurance company in India.

Policyholders can get this list of permanent exclusions in the policy document that has a category with the name ‘Permanent Exclusions.’ Before buying a policy you are expected to read this list. Although nearly every company has the same list of exceptions, you must read it anyway. You can get this list on the company’s website.

Some of the common ‘Permanent Exclusions’ includes:

• AIDS and diseases related to HIV
• Dental treatment
• Circumcision or sex change operation
• Birth control procedures, hormone replacement therapy, infertility etc.
• Routine medical care, eye and ear examinations and cost of spectacles.

4.            Waiting Period Concept for Chosen Diseases

No matter from which company you buy a health insurance policy, each of this policy has a ‘Waiting Period’ concept for a list of selected diseases. The chosen illnesses will not be covered for first few years, which is generally 2-4 years. For instance, if you buy a policy in 2014, the selected diseases will be covered in 2016 or 2018.

This is the most important point, which customers do not pay attention to. If they get hospitalized for the illness under the waiting period in the first year, the claim gets rejected. In this case, the policyholder blames the company for bluffing.

Some of the common illnesses which are part of the waiting period list are:

• Dilation and Curettage
• ENT Disorders & surgeries, Deviation and Sinusitis
• Kidney Stone, Gall Bladder Stone
• Arthritis, Spinal Disorders, Joint Replacement Surgery and Osteoporosis.
• Cataract
• Internal Tumors, Skin Tumors, Cysts.
• The Bottom Line

Health insurance policy should be taken to make sure that you are covered from future problems. But most people buy insurance policy when a disease strikes them, and that’s when a health insurance policy won’t help you much. One should buy a policy when they are healthy and fit; to make sure they get covered for any long term medical issues.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in