Introduction
With medical inflation, rising lifestyle ailments, and a pandemic outbreak, health insurance plans have never been more in demand. Such policies are crafted to secure your finances against an affordable premium during medical emergencies.
Now, while health insurance plans are quite a smart financial move crafted for your benefits, health insurance providers also have some restrictions to ensure the appropriate use of such funds. Subsequently, each health insurance plan has certain restrictions, clauses, sub-limits, and exclusions. These are put in place to safeguard the financial interests of health insurance providers.
However, as potential or existing policyholders, you need to be well-informed about the exclusions involved in the policy. This will help you ensure you don’t face any issues during claim settlement. Let’s explore the permanent exclusions in health insurance plans in detail now!
What are Permanent Exclusions in Health Insurance Plans?
Some diseases, treatments, and causes of ailments are never covered by health insurers. These are called permanent exclusions. Health insurance has two types of permanent exclusions: time-bound and permanent. Here’s a quick look at these two categories.
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What are the Types of Exclusions in Health Insurance?
- Time Bound - Some conditions are categorised as exclusions only until a certain time limit. After this pre-decided span, insurers cover these conditions. This period is called the Waiting Period in health insurance.
There are four main types of waiting periods:
- Initial Waiting Period: Under this, your insurer will not cover any ailment for the first 30 days after purchasing a plan. The only exception is in cases of accidents, wherein the insurer covers the charges required for the policyholder's treatment.
- Pre-Existing Medical Conditions Waiting Period: Insurers may impose a waiting period if the policyholder has a pre-existing ailment that increases the risk of payouts. This usually lasts 2-4 years, depending on the policy and the insurer. Any complications arising from these particular diseases will not be covered under the policy during this period.
- Specific Illness Waiting Period: Apart from the pre-existing diseases mentioned above, each insurer has a list of specific ailments they do not cover within a particular period. This usually lasts between 1-2 years from the date of purchase, and these are non-lethal diseases such as cataracts, GERD, benign cysts & polyps, etc.
- Pregnancy-related Waiting Period: If you and your spouse want to have your maternity covered under the insurance policy, BOTH of you need to purchase a plan, opt for the maternity rider (in case it’s not an in-built feature) and serve the waiting period. Such waiting periods usually last for 2 - 4 years.
2. Permanent Exclusions: Certain conditions are “not covered” for almost all health insurance providers, and no waiting periods or sub-limits can change that. These conditions include injuries due to war, attempted suicide, adventure sports, injuries to perpetrators of terrorist acts, etc. More often than not, these are reasonable exclusions built to safeguard the company's financial security.
What are the Top 9 Permanent Exclusions in Health Insurance Plans?
- Injuries Sustained due to War
War, riots, coups, nuclear or chemical weapons, etc, are almost always permanently excluded in most health insurance policies.
2. Adventure Sports
For those with an acute interest in adventure sports, your health insurance provider will not be too interested in covering the treatments for any injuries sustained from such sports. Thus, it's better if you can either avoid such sports or be extremely cautious to avoid injury during the practice of such sports.
3. External Congenital Disorders
Newborns may have certain disorders that they are born with. These are called Congenital Disorders, and they are of two types:
- Internal: These diseases are not easily identifiable because the newborn has no physical anomaly.
- External: These are clearly visible disorders, primarily involving appearance. Club foot, for example.
If a person suffers from external congenital disorders and their policy covers maternity care, the insurer is not obligated to cover the treatment costs. This is because the IRDAI states that only ‘Internal Congenital Disorders’ are not to be excluded by the insurer.
4. Consumables and Non-medical Expenses
Consumables are items used in treatments that cannot be used again. They are not covered because there is no yardstick measure and the usage of these items can change from one hospital to the other. Hospitals can also easily overcharge patients for these items, and this cost will, in turn, be borne by the insurer. To avoid this, insurers usually completely exclude this from their base plans.
However, since consumables have a fair share in the hospital invoices, currently, we have a few health insurance plans that offer coverage for consumables as an in-built feature (like HDFC ERGO Optima Secure) or as an add-on (like HDFC ERGO Optima Restore and NivaBupa ReAssure 2.0)
5. Treatments in Blacklisted Hospitals
Some hospitals are not recognised by the insurance company or have been deemed ineligible for coverage. These facilities are called blacklisted hospitals and usually end up on this list because they were engaged in some criminal activity or fraud conducted by the administration with the insurance provider.
When approaching a health insurance provider, make sure to enquire about any blacklisted hospitals and avoid treatments in those facilities.
6. Injuries and Hospitalisations Related to Alcohol or Substance Abuse
Insurers do not cover treatment for ailments that arise because of alcoholism and substance abuse. When purchasing the policy, you must fill out a questionnaire, which will disclose your lifestyle habits. In case you smoke, the insurer has a separate premium for the smoking and the non-smoking profiles. On the other hand, if you are an alcoholic with a history, the insurer will not be covering any treatments for ailments/accidents caused due to its effects.
7. Cosmetic Procedures
Insurers almost always exclude cosmetic procedures because they are not deemed ‘medically necessary’, except in cases of accidents that alter the individual's physical appearance. Interestingly enough, dental treatments are also considered cosmetic procedures, which is why they are excluded in most policies.
8. Injuries due to Breach of Law with Criminal Intent
In case the policyholder is involved in any criminal activities, the insurer, quite naturally, refuses coverage for any treatments required for the injuries sustained during the activity.
9. Attempted Suicide
Unfortunately, injuries sustained due to attempted suicide are permanently excluded.
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Conclusion
While permanent exclusions differ from plan to plan, they will always exist irrespective of the policy and the insurer. While this safeguards the insurer, as a policyholder, we must read all the policy documents carefully and be aware of them.
At the end of the day, despite these restrictions, purchasing a policy at an early age is highly recommended. This is because of rampant medical inflation, rising lifestyle ailments, and a host of other factors.
