Consumers should understand exclusions in their insurance policies before purchasing one, according to Allianz Life Insurance Malaysia Bhd.

Allianz Life head of underwriting Ho Ai Mee said in a statement, “Exclusions are basically risks that are not covered by the insurer. Common standard exclusions in a basic life insurance policy under the Total and Permanent Disability (TPD) contract are fraud, war, riot and civil commotion.

“If the TPD occurs as a result of these acts or due to these events, the insurance benefit will not be payable. When purchasing a policy, people should never take exclusions for granted so that it does not affect their claims process in future.”

If an individual purchases a policy without realising the exclusions, claims will not be payable according to the terms and conditions of the contract when the claim falls under a particular exclusion.

Ho said that some of the exclusions in life and health insurance policies that are commonly taken for granted are where pre-existing conditions and/or specified illnesses are not covered when they occur during the waiting period.

The waiting period usually commences from the date the policy is issued or reinstated. These standard exclusions will be clearly stated in the policy contract.

Other exclusions that are often taken for granted are those imposed during the underwriting process. These are known as specific exclusions, which are imposed on an individual contract due to the individual’s health condition, occupation and avocation, among others, depending on the degree of risk involved.

For health conditions, exclusions imposed are mainly on the prognosis of the medical condition and possible recurrence.

According to the statement, specific exclusions can be imposed when the insurance company sends a conditional acceptance letter to the customer to inform him or her about the exclusions. If the customer agrees to the exclusions, he or she needs to provide consent by signing the reply slip provided with the conditional acceptance letter. This letter will then be attached to the policy contract as proof of consent.

In some cases, specific exclusions can be removed once the risks no longer exist. An example is that if the life assured’s health condition has improved for some time with no possible recurrence of the risk, he or she can request for removal of this specific exclusion from the contract.