Know Before You Claim : 4 Common Claim Rejections Explained

Buying insurance is an important step toward protecting your future, but it can be very stressful when claims are denied. Let’s understand its limitations, and by knowing when your claims might not be fully paid—or even rejected—can save you from some unpleasant surprises later.

In my experience, here are four common reasons why a medical insurance claim may be denied:

• Your policy is still within the waiting period

• The treatment is excluded from your policy

• It's a non-illness related hospital stay

• The policy has lapsed or exceeded coverage limits

When a claim is rejected, it usually means the insurer can’t issue a guarantee letter to the hospital, leaving you responsible for covering the medical bill yourself. And let’s face it—that can be really scary.

According to the Credit Counselling and Debt Management Agency (AKPK), 26% of the RM4.8 billion in debts and non-performing loans (NPL) it was handling as of October 2022 were attributed to medical treatment costs incurred at private hospitals

Since insurance policies aren’t exactly bedtime reading, I’ve broken down some common exclusions and scenarios where your claims may not be fully covered. Here’s a summary that’s easy to digest:

1. Time-Related Exclusions

• Waiting Periods: Conditions or illnesses that occur during the first 30 to 120 days of your policy aren’t covered, except for accidental injuries.

• Pre-existing Conditions: Any health condition diagnosed before your policy began is usually excluded.

• Self-inflicted Injuries: Unfortunately, injuries caused by self-harm or suicide attempts aren’t covered.

• Routine Checks: General medical check-ups or investigations not related to illness treatment are excluded.

2. Specific Treatment Exclusions

• Cosmetic or Non-Essential Procedures: Things like plastic surgery, LASIK, and cosmetic treatments aren't covered.

• Dental Treatments: Unless it’s due to an accidental injury, most dental work is excluded.

• Gender-related Treatments: Sex changes, hormone replacement therapy, or treatments for certain sexually transmitted diseases are excluded.

• Preventive or Experimental Treatments: Anything not yet recognized by the Ministry of Health Malaysia is likely excluded.

3. Health Issue Exclusions

• Pregnancy & Related Care: Pregnancy, childbirth, miscarriage, and infertility treatments are typically excluded.

• Mental Health: Coverage for psychiatric or psychological conditions may be limited.

• Communicable Diseases: Quarantine-required diseases (except some covered COVID-19 cases) are excluded.

• Other Health Issues: Sleep disorders and non-essential hormone treatments often fall outside of coverage.

4. Lifestyle and Activity Exclusions

• Substance Abuse: Treatments for drug abuse or intoxication aren’t covered.

• Risky Activities: Coverage doesn’t extend to injuries from extreme sports like diving or rock climbing.

• Illegal Activities: Engaging in unlawful activities can void your coverage.

• Private Flying: If you’re flying a non-commercial aircraft, your policy may not cover related accidents.

5. Non-Medical Service Exclusions

• Non-Medical Expenses: Costs like TV rentals, telephone usage, or non-essential items like sunglasses post-eye surgery are not covered.

• Organ Donation: Expenses related to donating organs are typically excluded.

6. External Factor Exclusions

• War or Civil Disturbances: Any injury resulting from war, terrorism, or civil unrest may not be covered.

• Radiation Exposure: Claims related to nuclear radiation or contamination are generally excluded.

7. Overlapping Coverage Exclusions

• Other Insurance: If your injury or condition is already covered by another policy, like employee benefits or SOCSO, your medical insurance may not apply.

8. Partial Claims: Cost-Sharing Clauses

Sometimes, even when your claim is approved, you might still need to share some costs with your insurer. Here’s how it usually works:

• Deductibles & Co-Payments: You’ll need to pay a certain amount before the insurer covers the rest. For example, if your bill is RM50,000 and your deductible is RM1,000, you pay RM1,000 while the insurer covers RM49,000.

• Room and Board Limits: If you stay in a hospital room that exceeds your plan’s limit, you might need to share more of the cost.

• Annual Limits: If your medical bills surpass the annual coverage limit, you’ll be responsible for the remaining balance.

How to Ensure You’re Fully Covered

• Review Your Policy: Go over your policy, especially the cost-sharing clauses, so you know what to expect.

• Upgrade If Necessary: Consider updating your policy to keep up with rising medical costs and new treatment options.

• Know Your Panel Hospitals: Make sure you’re familiar with the hospitals covered by your plan and have their contact information on hand.

If you’re feeling unsure about where you stand with your current coverage, don’t hesitate to reach out! We can schedule a quick policy review and help you break down the insurance jargon so you can navigate your coverage with confidence.