For sale, baby shoes, ever worn.
I met my soulmate. She didn’t.
Disputes among nation; sorrow among families.
These are sad six words stories.
We have one more to add.
Your insurance does not cover this.
Not everything is insurable.
As much as we will like to protect everything, it is not possible to insure everything.
This is not just a budget issue – the cost of insuring everything is prohibitive.
It is also a real life issue.
Insurers are always trying to keep up with the times and increase the items that they may provide a protection value on.
Americans with HIV is able to insure themselves; NTUC Income is giving your assurance while you are riding your hoverboard or other Personal Mobility Device.
Even with the changing times, there are still things that are un-insurable.
Some are pretty much set in stone as they go against the very fabric of insurance.
Others may become available as insurance business progresses further.
Driving your car to knock onto your arch enemy?
Hurting yourself so that you may get a payout from your Personal Accident plan?
These are not covered by any insurance on earth.
This is due to the moral hazard.
Moral hazard refers to the lack of incentive to guard against risks when one is protected from its consequence.
If you are shielded from the financial impact of a lawsuit or medical expenses, you may be more inclined to do it.
Obviously, insurance companies want no part of that.
Acts that are illegal.
Insurance is designed so that it will not shield you from the law.
It should not condone or encourage illegal acts.
When you examine your policy, you may find that the insurance contract is likely to function only if you abide by the law.
For example, drink-driving is not only illegal but also one common exclusion under your motor vehicle policy.
Fraudulent activities are also not covered.
This is something that we do not expect to change.
So do think twice before you decide to start your criminal career.
Another principle of insurance is adverse selection.
People who are more susceptible to certain illnesses or injury are not exactly the target audience that insurers are looking for.
Insurance company prefers a pool of healthy people than one of a riskier variety as the latter will definitely cost more in the long run.
This forms the main reason why you should buy insurance when you are healthy.
Since we do not know when illness or accident may happen, it is imperative for you to get cover as soon as possible.
Lately, we notice that Pre-Existing conditions are being covered by NTUC Income’s travel insurance.
You have to pay extra to enjoy the coverage.
Hopefully, the actuaries will be able to calculate the right amount of premium to include pre-existing conditions in life insurance.
Wear and tear
For you to claim, the loss must be fortuitous.
Wear and tear, however, is not accidental.
It is very much expected.
This is why your policy does not pay you for your regular servicing of your air-conditioner.
Or for your worn out tyres.
Wear-and-tear is applicable to general insurance (non-life) only.
Thus, your medical insurer should not be rejecting your claim just because your illness is an age-related one.
Normal pregnancy / suicide within a year
Once again, expected events are seldom insurable.
The normal pregnancy delivery expenses are not included for your hospitalization plans as it is expected for you to incur them when you have a baby.
However, if complications arise from pregnancy, it is actually being covered in maternity plans and some other insurance policies.
We understand that there is a movement to include the usual pregnancy expenses into insurance contracts.
It is started by feminists to battle the perceived sexual discrimination
Frankly, this is more of an insurance concept, rather than a gender issue.
Suicide within a year or any other specific period is also something that is not covered.
This is to prevent both adverse selection and moral hazard.
Geographical limitation is one exclusion that may be embedded into your insurance policy.
You may need to reside in a specific country to enjoy the coverage.
War and terrorism exclusion are common in general insurance.
Often than not, war and terrorism have wide and far-reaching consequences so the insurers usually avoid catastrophe events so as to limit their financial exposure.
Alternative medicine such as TCM and hospice service may not be covered in some policies.
You may want to check your medical plans thoroughly before going to your Chinese Sinseh.
Bringing it to a close
These are some un-insurable things that one should take note.
However, we are certain that the list will dwindle due to ever-changing technology and healthcare improvements.
In the meanwhile, it is vital for you to know them so that you will not be left disappointed.
Too often we hear about nasty stories about insurers ratting out on their promises.
It turns out that it is usually an insurance exclusion at work.
By understanding the limitations of insurance, you may evaluate and manage your risk better.
Sad insurance six-word tale must end!
Have a look at your policies today.
Share with us on any other exclusions that we may have left out.
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.