By Vikas Madhukar & Rishi Manrai

Most of us do not read the offer documents of a health insurance policy and later blame the company for rejection/deduction of insurance claims. Most insurers apply sub-limits to the claim amount of health insurance policy to limit their liability under certain covers. It is important to note that being a part of original policy coverage limit, these claims are inclusive of sum assured.

What are sub-limits?

Sub-limits fix a monetary cap on the insurance services expressed as a fixed value for a particular ailment included in the total sum insured. These limits are generally applicable on room rent, doctors’ consultation fee, post hospitalised charges and a few pre-planned medical procedures, such as knee ligament reconstruction, cataract removal, kidney stones, sinus, etc.
A health insurance plan with sub-limits , however, is more affordable compared to the plan without sub-limits, as they restrict the liability of insurance company. A health insurance plan without sub-limits allows you to avail the benefit up to the value of the sum insured limit, thus making you stress-free about medical expenses such as room rent, ambulance charges, etc.

Average expenses

Sub-limits are applied by insurers by estimating the average expenses of insurance claims under different heads (like ICU charges, treatment costs, doctors’ visiting charges, anaesthesia charges, etc.) by surveying average hospital expenses to mitigate fraud on inflated insurance claims.

In absence of any specific guidelines by the Insurance Regulatory and Development Authority of India (Irdai), this sub-limit vary from company to company. Due to limited coverage in policy, the sub-limit may hurt one who is totally dependent on the insurance policy to take care of medical expenses. The claim may either be rejected, or the policyholder will have to bear some portion of the expenses from his own pocket.

Policyholders must check their individual medical requirements as well as the budget, especially if there is a family history of any ailment. This will help policyholders in planning their medical requirements and mitigate the policy premium liability. In case policyholders find that the actual coverage is insufficient to meet the stated requirement, the sum insured can be increased. Undoubtedly this will also increase the premium amount on the policyholder but will provide sufficient insurance cover.

Another important aspect that needs to be taken care of is co-payment function (in which a part of the claim is paid by the policy holder) and a list of exclusions which are mentioned under the given policy. It is better to get admitted to a network hospital since the tariff structures of all the services offered by the network hospitals are congruent to the sub-limits of insurance claims mentioned in the insurance policy document.

What to do before buying a policy?

Policyholders must consider the following points before signing the offer document.

• Understand the medical insurance needs in terms of family disease history, life style, job risk and overall health profile;
• Estimate medical cover required to take care of all medical requirements;
• Monthly/annual medical budget;
• Compare the different medical policies, sub-limits vs no sub-limits, deductions and co-pay;
• Choose the most suitable one to maximise the benefit from the policy.