Reading the fine print before buying insurance

If you've just purchased or are going to purchase an insurance policy for the first time, you may be overwhelmed by the terms and conditions you'll encounter. 
Jan 2023
3 mins read
Let's take a deeper look at some key terms & conditions to understand your policy better.
Reviewing the insurance to check for any loopholes that may affect your coverage or costs is crucial. A basic understanding of insurance contracts can help you avoid errors which might affect your coverage.
Instead of signing without reading the fine print, carefully go through your insurer's policy features to ensure that the insurance policy you're signing up for should protect you when you need it the most. Here’s what you should be mindful of before buying a policy.

Read the fine print
Insurance policies outline specific conditions and penalties if certain conditions are not met. Contract essentials like offer & acceptance, considerations, legal capacity, and legal purpose should be carefully understood before signing any documents. It is best to discuss the pros and cons of a policy with your beneficiaries.

Understand the policy terms
A health insurance contract is a legal agreement between you and the insurance company. In this case, the insurer agrees to shoulder a portion of your financial burden in the event of a medical emergency. It is important that you choose a health insurance plan and the company wisely. Thus, before purchasing any health insurance, you should be aware of policy terms like plan included and exclusions, policy premiums and sum insured, optional coverage, of the co-payment provision.

Check the exclusions
Health Insurance policies do not cover pre-existing conditions, lifestyle-related illnesses, cosmetic surgery, hearing, or vision. Typical exclusions such as the cost of contact lenses, spectacles, and hearing aids are also not covered. Dental surgery/treatment (unless requiring hospitalization), congenital external defects, convalescence, venereal disease, general debility, use of intoxicating drugs/alcohol, self-inflicted injuries, AIDS, diagnosis expenses, infertility treatment, and naturopathy treatment are also excluded.

Disclose all facts
If you own a term insurance policy, it is critical that you inform your beneficiaries about the terms and conditions that come with the policy. Beneficiaries should comprehend and be aware of what is covered by a term policy and what to expect during claim settlement. Insurance firms may reject your claim if you provide inaccurate or misleading information or failed to disclose existing health conditions.
Due diligence before buying a policy would help you understand your policy better. Engaging with a financial advisor is advisable if you are not able to understand the complexities of insurance policies.
PGIM India Asset Management Private Limited
(CIN - U74900MH2008FTC187029)
Toll Free Number: 1800 266 7446
Email: care@pgimindia.co.in
This is an Investor Education and Awareness Initiative by PGIM India Mutual Fund.
All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
The information contained herein is provided by PGIM India Asset Management Private Limited (the AMC) on the basis of publicly available information, internally developed data and other third-party sources believed to be reliable. However, the AMC cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance* (or such earlier date as referenced herein) and is subject to change without notice. The AMC has no obligation to update any or all of such information; nor does the AMC make any express or implied warranties or representations as to its completeness or accuracy. There can be no assurance that any forecast made herein will be actually realized. These materials do not take into account individual investor's objectives, needs or circumstances or the suitability of any securities, financial instruments or investment strategies described herein for particular investor. Hence, each investor is advised to consult his or her own professional investment / tax advisor / consultant for advice in this regard. The information contained herein is provided on the basis of and subject to the explanations, caveats and warnings set out elsewhere herein. The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding investment/ disinvestment in securities market and/or suitability of the fund based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary.