Why you should thoroughly read sub-limit clause before buying a health insurance policy

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Sub-limit in a health insurance policy refers to the cap put by health insurers for various medical treatments covered within the policy. Notwithstanding the total sum insured offered by the health insurance policy, the treatment or condition cannot exceed the set sub-limit. Sub-limits can be in the form of a specific amount or percentage of the total sum insured.

For example, your health insurance policy might only cover 1% of the total sum insured under room rent. That means that if you opt for a health insurance plan with a sum insured of INR 3 lakh, you can stay in a room with a tariff of INR 3,000. Alternatively, if you decide to stay in a room with higher rent, you will have to pay the difference from your pocket.

What is the importance of sub-limits in a health insurance policy?

Sub-limits are essential to evaluate a health insurance policy. Most health insurers include two significant types of sub-limits to their policies – hospital room rent and inpatient treatments/procedures. In addition, some insurance companies make sub-limits optional, depending on the budget that the insured has.

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However, it is essential to note that an Insurance policy without sub-limits always incurs higher premiums for policyholders. Before choosing a hospital for medical treatment, policyholders should check if charges such as room rent and medical procedures are well within the reimbursable limit set by that hospital.

What are the two major types of sub-limits that a health insurance policy contains?

Sub-limit on room rent

Most health insurance policies have upper limits set for room rent charges per day, and sometimes even the room type is capped. For example, your insurance policy might cover 1% room rent and semi-private room options, otherwise called general room only. If you wish to stay in a private room, you may have to pay the extra amount out of your pocket.

Moreover, your hospital charges are compliant with the type of room you opt for. It means that the fees for surgical procedures, doctor consultations, and operation rooms might depend on the room you choose. For example, if you select a twin-sharing room, your medical expenses might be lesser when compared to when you choose a private room.

You must consider discussing upper limits with your insurance provider before choosing a room to avoid last-minute confusion and to set the right expectations from your claim settlements.

Sub-limit on specific treatments

Insurance providers add a sub-limit clause to specific treatments covered within your health insurance policy. You must consider them before buying a health insurance policy to set the right expectations from claim settlements. Even though the sum insured might be higher, the sub-limit clause is specific to a particular treatment, illness, or procedure. It might not allow you to claim the entire hospitalization expense that you might have incurred.

For example, say your sum insured is INR 10 lakh, but the sub-limit on a Cataract treatment is only 50% of your entire sum insured. Therefore, you will only be able to claim up to INR 5 lakh on Cataract expenses due to the sub-limit clause.

To ensure that your hospitalization and claim settlement procedure is seamless, you need to thoroughly go through the sub-limit clause of your health insurance policy. Read these clauses and choose a policy that best fits your requirements, including your budget and needs.

Other sub-limits covered in your health insurance policy might be –

• ICU charges
• Sub limit on Parental sum insured
• Sub limit for major surgeries

Choosing the right health insurance policy requires a thorough examination of various policies before buying one. Sub-limit clauses in your policy might be limiting. However, make sure that you opt for sub-limits for features that you might need, in turn helping you reduce your policy premium.

(By Nikhil Chopra, Chief Business Officer, Medi Assist Healthcare Services)