Definition
Exclusion
An exclusion is a specified condition, event or circumstance that an insurance policy does not cover.
Every policy lists exclusions to define the boundaries of cover and exclude uninsurable or priced-out risks, common health exclusions include cosmetic surgery, self-inflicted injury and certain congenital conditions, while motor exclusions cover driving under the influence or without a valid licence. IRDAI has standardised many health exclusion wordings to reduce ambiguity.
Understanding exclusions is as important as understanding what is covered, since claims are routinely repudiated on exclusion grounds. Standardised, clearly listed exclusions help policyholders know exactly when the policy will not respond.
Related terms
- Waiting PeriodA waiting period is the time after a health policy starts during which claims for specified conditions or treatments are not payable.
- PerilA peril is the actual cause of a loss, such as fire, flood, theft, accident or illness, against which insurance provides protection.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.