In the last few years, having a health insurance policy has become a must owing to the increasing lifestyle-related ailments and constant rise in healthcare costs. When buying an adequate health insurance, there are numerous factors that must be kept in mind to get the best coverage possible. It is recommended to properly know and understand the jargons of insurance like sub-limits, critical illness and pre-existing diseases related to health insurance. Amongst all these essential features, sub-limit tends to be the most under-rated feature even though it is one of the most crucial elements in a health insurance policy.
What is a Sub-limit?
A sub-limit clause in a health insurance policy is a cap that the insurer puts for the policyholder on expenses against a specified medical procedure. It is usually a predetermined limit by the insurer on the total claim amount for some specific diseases or medical treatments. Insurers mostly place sub-limits on doctors’ consultation fee, hospital room rent, ambulance charges and some pre-planned medical procedures such as plastic surgery, cataract operation, knee ligament reconstruction and a few more.
However, it must be noted that the sub-limit usually varies from claim to claim. In some of cases, the sub-limit may be a defined percentage of the total sum insured while in others, it may be up to a specific amount specified by the insurer. In general, the ICU charges and the cap on hospital room rent are usually 2% and 1%, respectively, of the total sum assured. Let us understand this better with a small example.
If you have a medical insurance of Rs 10 lakh sum assured, then at the rate of 1%, your room rent cap will be Rs 10,000 which means you can select a room in the hospital with room rent up to Rs 10,000/day. As for particular medical procedures like a cataract removal surgery, if the insurer has a cap of Rs 40,000 on the treatment of cataract, the insurer will only pay up to Rs 40,000 for the treatment regardless of the total sum assured or the cost of surgery.
However, many health insurance companies provide you the flexibility to opt out of sub-limits by offering you the option of paying an extra premium. Depending on your budget, you can opt for either of the two options.
Different Types of Sub-limits
Mostly, a sub-limit is usually divided into two different categories.
# Disease-Specific Sub-Limit
The disease-specific sub-limit applies to some common ailments and pre-planned medical procedures including cataract removal, kidney stones, sinus, tonsils, hernia, knee ligament reconstruction, piles and many more. Most of the times, hospitals even include sub-limits on doctor consultation fees, ambulance charges, oxygen supply, anaesthetists’ charges and diagnostic tests (x-rays), among others. The list of ailments and the monetary cap on each of the treatments vary from one insurer to another.
# Hospital Room Rent Sub-Limit
Most health insurance policies have a sub-limit clause for the amount they will reimburse for the room rent you pay during a hospital stay. For instance, under a policy of Rs 10 lakh with 1% sub-limit on room rent, a hospital room with a maximum rent of Rs 10,000 per day will be approved by the insurer. For any amount of room rent above the defined sub-limit as per the policy, the insurer will only be liable to pay the permissible limit and the customer will have to cover the rest of the cost himself.