The Buyt Desk
The rapidly increasing healthcare expenses make a health insurance policy the need of an hour. It helps in securely meeting the costs of planned and unexpected hospitalization, medical treatment, and other healthcare costs. But before you finalize a health plan do check the sub-limit of that particular policy.
Let us assume that you purchased a health insurance plan with maternity benefit coverage with a sum insured of Rs.10 lakh around 5 years ago. You have also paid Rs.12,200 premium per annum. But, when your wife was admitted to the hospital for the delivery, you found that you were eligible just for compensation of Rs.50,000 towards maternity advantages. Your insurance plan had a sub-limit on the complete sum covered for maternity benefits.
What is A Sub-Limit?
A sub-limit is a pre-set financial limit that is applied to a customer’s claim amount by the insurer. Note that the sub-limit in health insurance policies would not be valid for the whole bill amount but just for specific situations. For example, ambulance costs, hospital room rent, treatment costs of particular diseases, ambulance charges, and many more.
Sometimes, the sub-limit may be computed as a percentage of the sum insured. For example, the insurance will cover up to Rs.5,000 if SI is Rs.5 lakh per room, and hospital room rent charges are covered at 1 percent.
Significance of Sub-Limits in Health Insurance
Insurance companies apply sub-limits to reduce their overall claims. Sub-limits are applied at the average rates charged by most hospitals. Hence, it can also prevent cases of fraud and inflated healthcare bills by customers. You can’t claim for all treatment or hospitalization costs due to sub-limit clauses even when you have a high sum insured.
All health insurance plans do not necessarily have sub-limits. Just some insurers provide options to get out of the clause. A health insurance plan without sub-limits will have a higher premium than those with sub-limits. So, examine the sub-limits before purchasing any health insurance plan to prevent last-minute confusion during your stressful situation. Make sure they better fit your budget and other requirements because sub-limits can offer you more limited coverage in the long run.
Types of Sub-Limits
Mainly, there are 3 kinds of sub-limits in health insurance as mentioned below.
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Sub-Limit on Room Rent
Insurance companies include the room rent per day, but just up to a specific amount. This limit ranges between 1–2% of the sum insured or other fixed sums of money.
For example, if your room rent cover is Rs.4,000 per day, and you take a room that costs Rs.6,000 per day, then you need to pay an additional Rs.2,000 on your own.
Moreover, your insurers may also set limits on the room type like semi-private rooms or general wards. Other medical expenses such as the cost of oxygen supply and doctor’s consultation charges may differ based on the room you rent.
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Sub-Limit on Pre or Post-Hospitalization
Some insurers also add sub-limits for the cost of pre and post-hospitalization. So, if your health insurance plan includes pre and post-hospitalization costs such as diagnostic tests, tests during recovery, etc., these may also cover in a sub-limit.
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Sub-Limit on Particular Treatment
Some health insurance providers can also apply sub-limits to certain diseases and/or treatments. For example, common diseases that are pre-planned processes include tonsils, cataracts, kidney stones, piles, etc. In this type of sub-limit, your health insurance provider will just cover a specific percentage of the bill for these diseases or treatments.
For example, if an insurance policy has a sub-limit of 50% for cancer treatment and the sum insured is Rs.15 lakhs, a customer can’t claim over Rs.7.5 lakhs for the same treatment.
What If Sub-Limits in Health Insurance Are Compulsory?
Health insurance policies without sub-limits will often have higher premiums. You may not be able to change the amount if you buy a plan with sub-limit clauses. The reason is that these clauses are determined by the insurance providers. So, before you opt for any policy, thoroughly determine the sub-limits given in the policy documents and also examine other important aspects such as inclusions, exclusions, co-payments, and deductibles. Increase the sum insured or simply change an insurer if your policy coverage doesn’t include your particular needs or healthcare expenses.
What If Sub-Limits in Health Insurance Are Unavoidable?
If you can’t afford a policy without sub-limits, ensure that specific diseases and/or treatment costs and room rent charges given in your policy document are reimbursable before you get admitted to a hospital.
Carefully check the sub-limits of your health insurance policy before you finalize its purchase. As discussed above, if the real coverage given in a policy lacks certain requirements or medical expenses, increase your sum insured. Sometimes, you can’t claim your hospitalization cost outstanding (due) to the sub-limit clause even when you have a high sum assured.
Let us assume that your health insurance plan has 50% of your sum assured as a sub-limit clause for a particular disease. You are not eligible to claim over half of your sum covered owing to the clause.
So, it is recommended to carefully and thoroughly check the policy document, associated terms and conditions, and important factors. Also, get admitted to a hospital listed by your insurance-providing company. This is because the former’s rate structure is generally in tandem with your health insurance policy sub-limits. Avoid purchasing policies with restrictive options including sub-limits on certain treatments, co-payments, and room rents. It may end up making you compromise your financial security or savings during medical emergencies.
