The meaning of “critical situation” in “critical condition” in an insurance policy is highlighted in the next post. However, it is important to understand why insurance companies use the term “critical” in the policies. The insurance company defines the term “critical” in various situations depending on the policy. For example, a critical term in an insurance policy might be applicable to the following situations.
- Permanent disability
- Permanent loss of sight of one eye
- Accidental injury or illness that requires hospitalisation of more than 24hours.
The meaning of the “critical” term in insurance will vary from company to company. For instance, one of the major insurance companies defines “accident” in insurance policies as an incident that causes physical harm to the insured person. The accident/injury needs to be sudden, unforeseen and unexpected for insurance purposes. So, if a person suffers a fatal accident, the insurance agency cannot reject a claim based on the definition ofaccident in the policy. Under this definition, the insurance policy will cover the death of the person even though the death was caused by heart attack.
If you are interested on reading more on the meaning of a term in an insurance contract, read What is the Importance of Being Honest on Insurance Claims from Attorney Ricky Anderson.
Avoiding “Critical” Situations
So, what is the reason behind implementingthe “critical” condition in insurance policies? Insurance companies do not want the policy holders to purposely cause circumstances that trigger the “condition” as shown in the definition above. The “condition” might not be in existence when the insurance company issues the policy so the company doesn’t want you to take advantage of the “condition”. Otherwise, the company would be held responsible for the damages instead of the policy holder. Insurance companies will sometimes use the words “may”, “should”, or “normally” in their policies and these words are an indication that the insurance provider will not accept liability if you caused the “condition”. The company might give you an advantage and automatically reject the claim if you are found to be at fault. But, if you manage to fool the insurance agent and convince them that you did not cause the situation,you will have a valid claim to your policy.
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