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Common Exclusions in Life and Non-life Insurance Policies

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here are multiple needs and to cater all of them, people usually go for multiple insurance policies which are health insurance, car insurance, term insurance & two wheeler insurance among others.

As you already know, life and non-life insurance (also known as general insurance) policies offer protection against any unexpected financial crisis. When purchasing an insurance policy, it is important to read the policy document carefully, especially the inclusions and exclusions of the policy. The coverage offered by an insurance policy is narrowed down by exclusions. What are exclusions? Those risks, expenses, damages, and events that are not covered by an insurance policy are called exclusions.

After going through the trouble of paying insurance premiums, it would be unfair for a beneficiary to face a claim denial because the policyholder failed to read a life insurance policy document for exclusions. Furthermore, knowing the exclusions of an insurance policy can help you purchase the right policy based on your insurance needs. Here are some of the common exclusions in life and non-life insurance policies:

Life insurance: A term insurance plan provides a death benefit in the event of the demise of the life insured due to a natural or accidental cause. The common exclusions of a term insurance plan include death by unnatural causes like suicide, self-inflicted injury, alcohol or substance abuse, participating in unlawful activities, terrorist attacks, natural calamities, sexually transmitted diseases, and taking part in adventure sports. Lifestyle-related habits such as smoking and drinking can affect the premium of a term insurance plan. If such lifestyle habits are not disclosed to the insurer at the time of policy purchase, then the policyholder may face a claim rejection as the life insured is considered as a high-risk individual.

Health insurance: Although a health insurance policy covers most illnesses, there are some ailments that are not included in the coverage such as pre-existing medical conditions, cosmetic treatments, self-inflicted injuries, and a few forms of therapies. Some health insurance policies offer coverage for pre-existing conditions (i.e. an illness that you may have at the time of policy purchase) have a long waiting period during which no claim can be made. The waiting period for pre-existing conditions is 2 to 4 years. Acupressure, naturopathy, magnetic therapy and such are not covered under a standard health insurance policy. Therefore, when choosing a health insurance policy, ensure the coverage includes an ailment or illness that you may have higher chances of contracting in the future. Which is why it is important to get a health checkup done when purchasing a health insurance policy.

Motor insurance: As per the Motor Vehicles Act, 1988, all vehicles (including cars, bikes, trucks, and buses) in public spaces across the country must have a valid third-party motor insurance policy. There are 2 types of motor insurance policies - third-party insurance policy and comprehensive insurance policy. A third-party car insurance policy covers only damages caused to a third party by your car whereas a comprehensive car insurance policy offers protection against third-party damages as well as any damage to you and your car. Damages caused due to the normal wear and tear of the vehicle, driving under the influence of alcohol or drugs, unlawful activities, intentional destruction of property, war, and racing are not covered by a car insurance policy. The same is applicable to two-wheeler insurance as well. Another exclusion of a standard motor insurance policy is the damage to electronic and electrical equipment in the vehicle.

Whether it is a life insurance policy or a general insurance policy, although the base policy may not cover certain risks, you can attach a rider to boost the coverage. Life insurance companies offer riders like critical illness cover, personal accident insurance cover, disability cover, etc. Similarly, health insurance companies offer riders like critical illness cover, hospital cash benefit cover, maternity benefit cover and the like. Motor insurance companies offer zero depreciation cover, engine protection cover, key replacement cover, etc. as riders. You can purchase a rider policy for an additional premium and add it to your base insurance policy. Riders can help enhance your insurance coverage that are otherwise narrowed down by exclusions.

In order to pick the best policy, compare various insurance plans across the top insurance providers in the country and choose one that best serves your needs. When choosing an insurer, check the claim settlement ratio of the company for that year. Also, the claim process must be simple and hassle-free. What’s more, the insurance company must offer online features that make it easier to purchase and renew insurance policies on the insurer’s website through a debit card, credit card or net banking.

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