Many insurance companies generally impose a sub-limit on the health insurance products purchased by a policyholder. A policyholder may not be able to claim

the full amount or coverage of his health insurance policy owing to such sub-limits. Sub-limits reduce the amount of claim made by a policyholder and increase the out-of-pocket amount which is paid by the insured.

A policyholder must learn about the sub-limits in detail before purchasing a health insurance policy. It is important to understand the sub-limits in order to avoid out-of-pocket expenses and obtain the maximum coverage from the insurance company.

Sub-Limits in Health Insurance

Sub-Limits in health insurance is a clause which states that the insurance company shall only be liable to bear the medical expense of the policyholder up to a certain limit. As a result, the remaining amount of the expenses shall be borne by the policyholder. However, it is important to note that the sub-limit is not expected to be applied to the entire medical bill. Sub-limits can only be applicable under some terms and conditions. This includes room rent or the treatment of certain diseases.

Let us discuss it with an example.

  • Mr A brought a health insurance policy with a sum insured of INR 6 lakh.
  • His health condition deteriorated which compelled him to get hospitalised.
  • According to the health insurance policy, the sub-limit on the room rent was 1%. Hence, the insurance company was liable to pay INR 6,000 on the daily room rent.
  • Mr A opted for a deluxe room which costs him INR 7,000 per day.
  • Mr A made a medical claim. The insurance company checked the policy and reimbursed INR 6,000 to Mr A.
  • Mr A was expected to bear the remaining INR 1,000 per day for a period he was hospitalized.

Types of Sub-Limits

One may find different types of sub-limits in a health insurance policy. This includes room rent sub-limits, post-hospitalisation charges sub-limits, specific medical condition sub-limits and so on.

Let us discuss the types of sub-limits in detail.

Specific Disease or Treatment Sub-Limits

An individual may find different types of diseases which are common in people. People generally suffer from these kinds of diseases. This includes high blood pressure, plastic surgery, cataracts, piles, kidney stones, gallstones, tonsils, hernia, knee ligament reconstruction, sinus and many more. The insurance companies generally impose sub-limits on the treatment mentioned above. For instance, the insurance company may add a clause which can specify that the insurance company shall only be liable to bear the cost of medical bills of up to 80 per cent.

Sub-Limit on Hospital Rent

The insurance company may impose a sub-limit on hospital rent. The hospital separately charges for the stay of the patient in the hospital. One may find a cap on ICU charges, ambulance charges, doctor’s consultation fees, room rent, etc that can be imposed by the insurance company.

The patient is allowed to select the room depending on his condition and comfort level. However, it is advised to opt for a room which is fully covered under the insurance policy. This shall help policyholders in order to reduce the out-of-pocket expense for medical treatment.

For example, Mr A was hospitalized. The room rent charges start from INR 5,000 and go on to INR 10,000 per day. The insurance company offers upto 1 percent sub-limits of the total sum insured INR 5 lakh. In this case, the policyholder should opt for the room rent charging INR 5,000 per day. This shall not impose any out-of-pocket liability on the policyholder since the insurance company shall offer INR 5,000 i.e., 1 percent of the sum insured INR 5 lakh.

Sub-Limit on Post-Hospitalisation

Major surgeries or hospitalisation may require the policyholder to continuously visit the hospital or the doctor for treatment. The treatment shall be continued even after the discharge of the policyholder. The insurance company offering post-hospitalisation costs may impose sub-limit. The policyholder is expected to bear the remaining cost related to the post-hospitalisation.

How to Circumvent Sub-Limits?

The rate or number of sub-limits is decided by the insurance company. Hence, the policyholder can do nothing more but understand the nature of the sub-limit before purchasing the insurance policy. The policyholder should contact the insurance company and understand the sub-limits imposed by the company in each condition. Another thing that a policyholder may do is to ensure that the medical expenses incurred by the patient are below the sub-limits imposed by the insurance company.

How can Sub-Limits Influence the Claim?

The sub-limits may reduce the claim amount. One may find a cap on the specific conditions. This includes room rent, post-hospitalisation charges, and treatment of some common diseases. The policyholder is only allowed to make the claim of the amount which is below or equal to the sub-limits. An amount more than the sub-limits is expected to be borne by the policyholder.

Conclusion

Sub-limits in a health insurance policy are an important aspect to be understood by the policyholder. This helps the policyholder to understand whether or not the amount claimed by him or the medical expenses incurred shall be subject to coverage under the insurance policy. However, it is important to note that not every health insurance policy comprises the sub-limits. Some insurance companies impose the clause of sub-limit and even offer the policyholder to either opt in or out of this clause. The premium without a sub-limit is subject to be higher. Therefore, the policyholder opts for sub-limits to reduce the premium. In addition, the policyholder always checks the budget and requirements of the policy before selecting the sub-limits. One may find the sub-limit on the online web portal of the insurance company. This helps the policyholder decide whether or not there is any requirement for a sub-limit in the health insurance policy.

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FAQs

Q. Does IRDAI have any role to play in deciding the sub-limits amount?

A. There is no rule which defines that IRDAI should specify the sub-limits of an insurance company. The insurance company decides the amount of sub-limit in a health insurance policy.

Q. When should an individual buy a health insurance policy?

A. There is no specific age to buy the health insurance policy. An individual should buy the policy as soon as possible. This makes the policyholder entitled to extensive coverage. In addition, it also reduces the premium amount of the policy.

Q. How can a policyholder check the sub-limit in a health insurance policy?

A. A policyholder may check the sub-limit in a health insurance policy by perusing the terms and conditions specified in the documents presented by the insurance company. However, if a policyholder fails to find it, he may contact the insurance company and enquire about the same.

Q. Does every health insurance policy include sub-limits?

A. No, only some insurance policies include the clause of sub-limits. It shall apply in case of low premium amount.