Sub-Limits In Insurance

What is a Sub-limit in Health Insurance Policy?

When planning to buy health insurance, certain factors must be considered to opt for the best possible coverage, such as waiting periods, deductibles, and co-payments. Among these essential factors, the sub-limit is often an underrated but crucial aspect of a health insurance policy.

A sub-limit is a pre-decided limitation on the claim amount for different conditions imposed on your health insurance policy by the insurer. These limits can apply to hospital room rent, doctor’s consultation fees, ambulance charges, and treatment for certain diseases, such as cataract removal or knee ligament reconstruction.

To understand sub-limits in health insurance, read on:

Understanding Sub-limits in Health Insurance

The term "sub-limits" in health insurance refers to a condition where the insurance provider will pay for medical expenses only up to a specific limit. These sub-limits are determined when purchasing a health insurance policy.

Example of a Sub-limit

• Shivam and his wife Prachi bought health insurance policies of INR 2 lakhs each, with similar benefits.
• After one year, Shivam and his wife had an accident and needed to be hospitalized.
• Shivam knew his health insurance sub-limit for room rent was INR 2,000 per day, so he opted for a room within that allowance.
• Prachi was unaware of her room rent allowance, so she opted for a room that cost INR 4,000 per day.
• During bill settlement after 4 days of hospitalization, the insurer paid Shivam the entire room rent for three days.
• However, Prachi had to pay an extra INR 8,000 from her pocket. This made Prachi disappointed, and she asked Shivam, "What is a sub-limit?"

Health insurance providers impose sub-limits on certain conditions such as hospital room rent, ambulance charges, or some pre-planned medical issues. Therefore, it is necessary to check the list of ailments covered under the sub-limit cap and the specific amount.

Types of Sub-limits in Health Insurance

A sub-limit is typically split into three categories. The list of ailments and the cap on treatment costs for various medical conditions may vary from one health insurer to another. Let’s take a look at the key types of sub-limits in health insurance:

1. Ailment-Specific Sub-limits

Ailment-specific sub-limits refer to conditions where the insurer sets a coverage limit on the medical expenses for specific diseases, such as cataract surgery, kidney stones, hernia, tonsils, or piles. Even if your sum insured amount is higher, you cannot claim your entire medical expenses due to the sub-limit clause on certain medical procedures.

For instance, if the insurer has put a sub-limit of INR 60,000 on kidney stone surgery, but the surgery cost is INR 70,000, the insurer will pay INR 60,000 as per the decided limit, and the policyholder must pay the remaining balance.

It is necessary to check the list of diseases/ailments under the sub-limits clause and the coverage limit specified against each. This will help you understand the coverage limit based on your health plan and make an informed decision.

2. Hospital Room Rent Sub-limits

Hospital room rent sub-limits refer to conditions where the insurer imposes a specific limit on room rent coverage per day. If policyholders opt for a hospital room that exceeds their sub-limit, the insured person will pay the remaining balance.

Some insurance providers offer sub-limit caps on room rent and ICUs, typically 1% and 2% of the sum insured, respectively. This may vary depending on different room packages.

For instance, if you hold an insurance policy with a sum insured of INR 6 lakhs, you can opt for a hospital room of INR 6,000 per day. In case the hospital room rent exceeds this sub-limit, you will need to pay the remaining amount from your pocket.

3. Pre and Post-Hospitalization Sub-limits

It is important to note that some health insurance providers also offer sub-limits for pre and post-hospitalization expenses in their health plans. After critical surgeries or prolonged hospitalization, a patient may still require routine checkups after discharge. Some insurers offer coverage for post-hospitalization expenses by imposing a sub-limit on these medical costs.

Pros and Cons of Sub-limits in Health Insurance

How Do Sub-limits in Health Insurance Affect Your Claims?

When health insurance policies include sub-limits, the final claim amounts are reduced. Since there are sub-limits on various aspects like room rent, ICU charges, ambulance charges, certain ailments and treatments, and pre and post-hospitalization expenses, insured individuals can only file claims within these sub-limits. This makes it easier to approve and provide medical care to customers while reducing the chances of fraudulent claim filing.

What If Sub-limits Are Mandatory?

While you can easily find an insurer that offers policies without sub-limits, such plans may come with higher premiums. As sub-limits are pre-decided by the insurer, if you bought a policy with these clauses, you would be unable to change the claim amounts.

In case the sub-limit coverage offered in the policy does not fulfill your specific requirements or healthcare costs, you can either increase the sum insured or opt for a different insurance provider.

Before making a final decision, look for a policy that fulfills your healthcare needs and fits your budget.

Conclusion

While buying health insurance, understanding sub-limits is essential because it can be a determining factor in whether or not a policy fits your requirements. Comparing the sub-limits of different insurers while selecting a health insurance plan is crucial to ensure a stress-free claim process during medical emergencies.