What are sub-limits in Health insurance policy

Owing to the increasing lifestyle-related ailments and constant rise in healthcare costs, having a health insurance policy has become imperative these days. When buying adequate health insurance, there are many factors that individuals need to keep in mind to get the best coverage possible. One of such crucial factors is sub-limit. For your better understanding, here we have discussed in detail what is a sub-limit, its forms, and why they are fixed by the health insurers.

A Sub-limit clause in a health insurance policy refers to the additional cap placed by the health insurers against expenses related to certain medical treatments/procedures. It is to be noted that irrespective of the sum assured, the insurers do not pay for treatment exceeding the sub-limit. If the treatment expense is more than the specified amount, then it is to be borne by the policyholder.

What are the different types of sub-limits?

A sub-limit is divided into two different categories-

Disease-specific sub-limit

Before finalizing the health policy, you must check the list of diseases/ailments which come under the sub-limits clause and the costs associated with them. Even if the sum insured is high, you cannot claim your entire hospitalization expenses due to the sub-limit clause for going with a specific medical procedure. For example, if the sub-limit for the cancer treatment is Rs 15, 00,000 and the sub-limit clause states that in case of cancer treatment the health insurer would make payment up to 50% of the cost, then the insurer would pay only Rs 7, 50, 000, the rest will have to be paid the policyholder.

Hospital room rent sub-limit

Under this option, your insurance company covers the room rent on a per day basis but only up to a certain limit. Also, there is a capping on the type of room rented. For example, the insurer includes only the general room or semi-private room in its insurance plans. If you require a private room, then you will have to bear the extra expenses on your own. If your room rent in your insurance plan is Rs. 4,000 per day and you opt for a room that costs for Rs. 6,000 per day, you will have to pay the difference of Rs. 2,000 from your side.

Most of the medical expenses that include doctors/ nursing charges, surgical procedures, or the operation theatre charges also depend on the type of room the policyholder avails of. Therefore, these expenses also add up in the sub-limit. The policyholder needs to discuss the sub-limit clauses with the insurance provider to avoid any unwanted surprises at the time of claim settlement.

Why are sub-limits fixed by health insurance providers?

One of the primary objectives of health insurance providers for inserting the sub-limit clauses in their policies is to reduce their liability to pay their customers. The insurance companies make estimates based on prevailing rates charged by the hospitals to mitigate frauds and to decrease their own overall claims outgo. It is important to note that there are no specific guidelines issued by IRDA (Insurance Regulatory and Development Authority) on sub-limits in health insurance policies offered in the country.

Bottom Line

It is highly recommended to choose only those policies that do not have discomfiting clauses and meet according to your medical needs and requirements.