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Must know about health insurance: When exclusion kicks in

When it comes to claims made under a critical illness policy, make sure you know when it will not be entertained
By OLM Desk | January 30, 2017

One limb, one eye or is it both the kidneys that need to be non functional for a claim to be cleared? Well, you cannot decide on how an illness will hit you, but insurance policies may have clearly marked exclusions that will decide how gory things need to be with illnesses for you to make a claim and be paid. The fundamentals on which claims on critical illness riders rests could be stringent enough and may actually seem restrictive with what is offered and what is not.

One of the draws for critical illness riders available with life insurance policies is to enhance the scope of the insurance cover and include risks associated with critical illnesses. Many pay out the stated sum on detection of the stated critical illness and the policy terminates with the payment. However, there are conditions such as survival period which are applicable before the money is paid out by some policies. For instance, pay out under critical illnesses comes into picture when the policyholder contracts the stated critical illness and then survives for at least 30 days after diagnosis of the illness.

What is left out?

In the absence of standardised policy terms, policy benefits vary and so do the conditions under which the policy benefits come into the picture. For instance in case of renal failure, an insurer will treat it so only when both kidneys stop functioning. What this means is that if a kidney fails, the policy will pay you nothing. Insurers argue that even with a single kidney a person can continue to live and function normally for most activities, which means the situation is not critical in nature.

The need to know policy benefits and situations when the critical illness condition comes into play should be well understood before buying the policy. Read the fine print carefully and if you cannot understand anything in particular; get it clarified by your agent or the insurer, lest you face a bad situation when you need the claim to go through. Many a times, the policy details have medical terms and conditions which may not be exactly what you perceive it to be in colloquial parlance, resulting in a situation which could have been avoided in the first place if you figure what you are going to get in the policy.

The most difficult condition of critical illness is turning deaf or blind, as insurers will not accept the situation to be critical in nature because a single eye and hearing defect are manageable. It is the same case with limbs, unless there is a loss of limb, disability is not accepted, even if the limbs are immobile. To make sure you get the policy proceeds, go over the exclusions with a tooth comb and also make sure you understand everything that is covered and excluded so that the policy works for you when you need it the most.

In recent years several cases have been referred to consumer courts on mattes where the policy proceeds have been denied on inadequate grounds. That, however, does not mean that you should go to the courts only to realise that the insurer was right in their stand to deny a claim, because it was stated in the policy document, which you over looked or did not understand when you were signing up.



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