Much of the disappointment at claim time comes from not knowing what exclusions a policy contains. This article collects the categories of exclusion most commonly found, so you can read a policy properly and set your expectations correctly before buying.
What an exclusion is
An exclusion is an event or condition that the policy states clearly is not covered. Even if it genuinely occurs, it cannot be claimed. Exclusions are not identical across plans, but there are broad categories found generally.
Common categories in life insurance
- Death by suicide within the period specified by law and by the policy after the contract begins.
- Being killed intentionally by the beneficiary.
- Death arising from a serious criminal act as specified in the policy.
Common categories in health insurance
- Diseases or conditions existing before the insurance was taken out (pre-existing conditions), under the specified terms.
- Treatment that is not a medical necessity, such as cosmetic surgery.
- General health check-ups not arising from illness.
- Events arising from the use of narcotics or alcohol, under the specified terms.
The actual list in any plan is more detailed than this, and some plans have additional specific exclusions, so always read the exclusions section of the policy document.
How to read exclusions usefully
An easy technique is to always read two sections together: the cover and the exclusions, because together they are the policy's real boundary. If you find wording you don't understand, ask the agent or the company to make it clear before signing — better than interpreting it when something has happened.
In short
Exclusions are not there to trip up the buyer; they define the scope of risk that plan can take on. A buyer who understands the exclusions chooses a plan that matches their needs better, and greatly reduces the chance of disappointment at claim time.