Explained: Sub-limit clause in your health insurance policy

Most policies have the upper limit decided for hospital room rent charges on a per day basis and on some occasions the room type is also capped

Explained: Sub-limit clause in your health insurance policy
It is important to note, however, that an insurance policy without sub-limits always results in higher premiums for policyholders.

Buying a health insurance policy without understanding its technical limitations can be a costly affair. Every insurance policy comes with a unique set of terms and conditions that may not always be similar to a previously bought policy. This depends on the sum assured, premium, and overall health condition of the insured person. Therefore, reading the policy document is the first step towards efficient usage of such financial aids. A sub-limit clause is a key component of any health insurance policy. It basically refers to the cap/limit put by the insurers for various medical treatments covered within the policy.

What is sub-limit clause?

“A sub-limit in a health insurance policy is a cap set by health insurers for various medical treatments covered by the policy. Regardless of the total amount insured under the health insurance policy, the treatment or condition cannot exceed the set sub-limit. Sub-limits can be expressed as a fixed amount or as a percentage of the total sum insured,” said Amit Chhabra, head – Health Insurance at Policybazaar.com.

Sub-limits are necessary when evaluating a health insurance policy. The majority of health insurers include two types of significant sub limits in their policies: hospital room rent and inpatient treatments/procedures. Furthermore, some insurance companies make sub-limits optional, depending on the insured’s budget.

Sub-limit on room rent

Most policies have the upper limit decided for hospital room rent charges on a per-day basis and on some occasions the room type is also capped. Consider this – your insurance policy covers 1% of the sum insured as room rent. Now, for whatever reason, if you want to stay in a private hospital room, you’ll have to bear charges beyond the capped amount despite having insurance. Moreover, ICU rent may have a separate sub-limit clause altogether.

Besides, the type of hospital room has a direct impact on other services given to the patient. This means the fees charged for surgical procedures, consultations or any other medical treatment will be expensive for a private room than a shared one. Therefore, have a look at the upper limit clause before selecting the hospital room.

Sub-limit on inpatient treatments

Health insurers often add the sub-limit clause to specific treatments covered within the policy. It is important to understand that the sub-limit clause isn’t necessarily dependent on the total sum assured. Your total sum may be higher but the sub-limit clause can be set to any limit for a particular treatment or surgery. This may prevent you from claiming the total hospital expense incurred for the treatment.

Your sum insured can be Rs 5 lakh while the sub-limit for eye surgery can be only 30% of the total amount. Hence, you will only be able to claim up to Rs 1.5 lakh for the treatment.

“It is important to note, however, that an insurance policy without sub-limits always results in higher premiums for policyholders. Before selecting a hospital for medical treatment, policyholders should ensure that charges such as room rent and medical procedures are well within the hospital’s reimbursable limit,” Chhabra asserted.

To avoid last-minute confusion and to set the right expectations from your claim settlements, you should consider discussing upper limits with your insurance provider before selecting a room, he concluded.

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