Understanding Sub-Limits in a Health Insurance Policy

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What are Sub-Limits in Health Insurance?

A Sub-Limit in a Health Insurance Policy is a pre-determined capping on an Insurance Claim for certain medical expenses and surgeries. So, a Sub-Limit is a Cap in a Health Insurance Policy upto which the Insured will be covered for the specific ailment. Sub-Limits are usually expressed as a percentage of Sum Insured. Sub-Limits in a Health Insurance Policy are applicable on various coverages like Room Rent, Cataracts, Hernia Maternity Expenses etc.

For example, Ms ABC, who has a Health Insurance Plan with a sub-limit of Rs1 lakh for Maternity Coverages. Ms ABC delivers a baby in a Hospital and total expenses incurred were Rs3 lakhs.

Ms. ABC receives a Claim of just Rs1 lakh on her hospital Bill of Rs3 lakhs because her Health Insurance Policy had a Sub-Limit of Rs1 Lakh for Maternity Expenses. She had to bear the remaining expenses of Rs2 lakhs out of her own pocket. Sub-Limits are an important feature of Health Insurance Policy and Policyholders should carefully evaluate the same by reading the Policy Wordings thoroughly. Sub-Limits help Insurance Companies control Claim Costs and keep premiums affordable for the Policyholders. However, Sub-Limits can also increase the medical expenses for the Insured if their claims exceed the sub-limit.

What are the different types of Sub-Limits in a Health Insurance Policy?

Sub-Limit on Room Rent

Room Rent refers to the daily charges for the room provided to a patient during hospitalisation. This includes bed charges, nursing charges, etc. Most Health Insurance Plans have a Sub-Limit on the Per Day Room Rent that will be reimbursed by the Policy. A Health Insurance Plan with a Room Rent Capping of 1% and 2 % of Sum Insured per day for Normal and ICU Rooms respectively will reimburse the Insured only upto a maximum Room Rent Limit of 1% and 2% of Sum Insured for Normal and ICU Rooms as specified in the plan. Any Room Rent Expenses over and above the room rent capping limit will have to be borne by the Insured himself. For example, if the Sum Insured of a Health Insurance Policy is Rs5 lakhs, then the Room Rent Capping would be Rs5000 and Rs10000 for Normal and ICU rooms respectively (Room Rent Capping of 1% and 2 % of Sum Insured per day for Normal and ICU Rooms). If the actual Room Rent Expenses exceed these Sub-Limits, the Insured has to pay the difference from his/her own pocket.

Sub-Limit on Specific Treatments

Health Insurance Policies also have Sub-Limits for Specific Treatments. So, even though the Policy Sum Insured may be high, the Policyholder will not be able to claim your entire hospitalization expenses due to the Sub-Limit Clause on specific medical procedures. Insurers often impose sub-limits or caps on the coverage provided for costly treatments like Cataracts, Dialysis, Radiation Therapy etc. For instance, a Health Insurance Policy with a Sum Insured of Rs10 lakhs may have an sub-limit of Rs50,000 per eye for Cataract Surgery. Once the Insured’s Cataract Surgery Costs exceed Rs50,000, he will have to bear the additional expenses out of his own pocket even though the Policy Sum Insured is Rs10 Lakhs

How to Check for Sub-Limits in a Health Insurance Policy?

The Insured should carefully read through Insurance Policy Wordings carefully to understand the Sub-Limits on Room Rents and specific ailments. Sub-Limits are usually mentioned in the sections defining Policy Benefits, Coverage Limits, or Exclusions. Focus on sections like ‘What is Covered’ and ‘What is Not Covered’. It is always better to check with your Insurance Broker directly about Sub-Limits before opting for a Health Insurance Policy.

What is the Difference Between Sub-Limits and Deductibles?

Both Deductibles and Sub-Limits restrict the coverage amount that can be claimed. However, while an Insurance Deductible is the amount that the Insured must first pay before the Insurance Company starts providing coverage, Sub-Limit is the maximum amount that the Insurance Company will pay to the Insured for a particular ailment. Deductibles apply to the total Policy Coverage while sub-limits usually apply to specific treatments or expenses.

For example, if a policy has a Deductible of Rs.10,000, then the Insured must pay Rs.10,000 first from his own pocket before the Insurance Company starts providing coverage. On the other hand, a Health Insurance Policy may cap Room Rent Coverage at 1% of Sum Insured per day. So, if the Policy Sum Insured is Rs5 lakhs, the max room rent covered by the Policy is Rs 5,000 per day.

Conclusion

Sub-limits are an important feature to keep in mind while buying a Health Insurance Policy. It is important to compare different Insurance Policies and their Sub-Limits before purchasing a Health Insurance Policy. So, if you wish to purchase a Health Insurance Policy, you can reach out to us via email at insurance@qian.co.in or call us on 022-35134695. We would be glad to assist you.

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