Understanding Sub-limit of Health Insurance Policy

Written on Saturday, June 17, 2017
By Amit Chauhan

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While picking a Health Insurance policy, there are many important aspects that an individual need to  keep in his mind. Room Rate Cap is one of the dominant aspects that should not be forgotten, else it may create challenges at the time of claims. Room Rate Cap  may induce sub-limits like waiting periods, day care procedures, deductibles so on, so it is better to get all the clarification  about it in advance. 


This is especially true for the Mediclaim policies that are offered by the PSA insurers or some of the older plans that people are carrying. A policyholder may feel that he is adequately covered till the time he ends up encountering the restrictions of sub-limits. This blog will help you understand about sub-limits of health insurance policy.  


What is a Sub-limit? 

Sub-limit is a monetary cap that health insurance companies place on the policies or claims offered by them. It is a predetermined limit on the claim amount for a specific disease or treatment procedure. It can be placed on hospital room rent, doctor’s consultation fee, ambulance charges and a few pre-planned medical procedures such as cataract removal, knee ligament reconstruction, etc.

Sub-limit varies from case to case, like in some cases sub-limit may be a percentage of the sum insured or a specific amount specified by health insurance company. In many cases, ICU charges and the cap on room rent are usually 2% and 1% of the sum insured, respectively. It means, if you have an insurance cover of 2 Lakh, then your room rent cap will be Rs. 2000 only @ 1%., thus your health insurance plan will entitle you only for a room within the charges of Rs.2000. However, many health insurance companies provide you the flexibility to opt out of sub-limits just by offering some extra premium. Depending on your budget, you can opt for either of the two options.
What are the Types of Sub-limits?
In most cases, sub-limits apply to common ailments and pre-planned procedures such as Kidney Stones, cataract removal, sinus, tonsils, hernia, knee ligament reconstruction, piles and so forth. 
Generally, health insurance policies include sub-limits on hospital room rent, physicians’ consultation fees, ambulance charges, oxygen supply, anesthetists’ charges and diagnostic tests (x-rays) among many others. It is important to note that the list of ailments and cap in treatment costs, varies from one health insurance company to another. Furthermore, some health insurance providers include sub-limits in their policies for pre-and post hospitalization expenses as well.
For example, the total hospitalization cost of a standard room is Rs 50,000, but the same can cost Rs 75,000 in a deluxe room, because of difference in nursing & doctor's visit fees between Standard and Deluxe Room. So, for a policy of Rs 3 Lacs with 1 percent sub-limit for room rent, any room with maximum Rs 3,000 per day rent can be selected and accordingly the package offered for that room will be approved by the insurance company. If you opt for a higher category room than what is permitted as per the sub-limit, then the insurance company will only pay the amount of permissible limit and balance amount has to be paid by you.
So What You Should do? 
The Mediclaim premium may not be a big amount, so you may decide to either buy through an agent or online without getting into too many details. That is not the right approach.
It may be a small amount but, its impact on your life is very big. We know that Health is Wealth, So, you must review various Mediclaim policies  before finanlizing one. Better, go for one-stop Insuarnce solution providers, who will understand your needs and guide you accordingly. Also, keep in mind that your chosen service provider should have a big claims team, so that it may help you with the claim, if something goes wrong at the time of the claim. 
Questions to ask while buying a Mediclaim policy –
1. Who I can get in touch with in case of a difficulty?
2. How many claim support team members do they have?
3. Is the service provider stable enough enough to lend its support even if I make my claim after15 to 20 years from now?
So, in summary it’s time to revise your health insurance and upgrade it, if required. Most people don't prefer switching their insurance plans as they feel it would lose their tenure benefits of the existing plan. But that's not true. For the last couple of years, IRDA has allowed porting, where you can move from an old plan to a new plan without losing your tenure benefits and it will be assumed that sum assured up to your old plan was bought only in the year you had bought your original plan.


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