Health insurance plays a significant role in one’s personal finance. One medical emergency can destroy your entire financial life. That’s the reason why we re-iterate the importance of medical insurance in financial planning. Choosing the right health insurance policy is as important as having one. A policy which does not help you in an emergency is of no use. A lot of health insurance policies have exclusions built in them. If you rush towards buying a policy without knowing these exclusions, you might land up in trouble when you are in need of the policy.
Every policy has limitations. There is no policy which covers every aspect related to your health such as diseases, accidents, risks, etc. However, choosing the one which covers your need is an art. Though these are not standard for all policies, there are some exclusions which you need to know before buying health insurance.
(Also see: 8 common blunders while buying health insurance)
Pre-existing diseases are those which you are already suffering from. Insurance is done for uncertain things. Since you are already suffering from a disease, you are less likely to be covered for it. Even if the insurer agrees to cover you for it, he will impose a waiting period for this. It could be 2-4 years or more, depending upon the type of disease and risk to the insurer. Some of the pre-existing diseases excluded could be cataract, kidney stones, arthritis, treatment for joints, few chronic diseases, etc.
Most of the policies do not start coverage immediately. There will be a waiting period of 1 to 2 months after which you will be covered under the policy. For example, even if you suffer from a disease which is not included in the exclusions clause, you will not receive the benefits. Accidents and deaths will not be part of this waiting clause.
Pregnancy and related costs such as child birth, vaccination, etc could be part of exclusions list in your policy. Like pre-existing diseases, pregnancy could also have a waiting period such as 1 or 2 years. If you are planning for a child after this waiting period, you could receive decent benefits.
Surgeries such as cosmetic surgery, joint replacement, dental surgery, are usually part of exclusions list in a health insurance policy.
Alternative treatment procedures such as Homeopathy, Ayurveda, etc are also excluded from a lot of health insurance policies. Only Allopathic treatment would be covered.
Exclusions related to hospital costs will be in the form of restrictions such as sub-limits on room rent, ambulance cost, doctor fees, etc. Be careful to check all these limits in the policy document so that you would be prepared in an emergency situation.
Apart from the above said exclusions, some conditions are permanently excluded in health insurance policies. These could be intentional injuries, injuries in war, HIV, congenital diseases, etc.
Health insurance seems to be a simple subject, but involves a lot of conditions. You need to carefully evaluate exclusions of the policy before hand. As said earlier, not all exclusions will trouble you. Choose a policy which has the least exclusions and which best suits your needs.