When you plan to invest in a health insurance policy, there are certain factors that you need to take into consideration in order to get the best coverage. Over the years, health insurance policies have changed a lot owing to the changing lifestyle ailments and the steady increase in medical costs. Whether you want health insurance plans for family or yourself, it is important to understand insurance jargon to make sure you sign up for the right benefits.
Pre-existing diseases, tax coverage, critical illnesses, and sub-limits are some of the salient features of new-age medical policies. Among these, sub-limit is an underrated element that people are not ready to talk about. In reality, it is a crucial part of health plans.
What is a sub-limit?
Sub-limit is a clause in your health insurance policy: a cap that the insurer adds on the policy holder's expenses for any specific medical process. Sub-limit is predetermined on the total sum insured for diseases and medical treatments. Generally, the sub-limit is put on a doctor's consultation fee, diagnosis charges, pre-medical procedures, room rent, etc. This may vary according to different claims. It may be a specific amount; for instance, hospital room rent is generally capped at 2% and 1% of the total sum Insured.
For example, if you take medical insurance of INR 10 Lakh, at a 1% cap, you will be able to submit a claim for room rent at INR 10,000 per day.
To get the optimal benefit, do your due diligence to find the best health insurance in India. Read the fine print, compare and then choose what is best for your needs.
Types of sub-limits
A sub-limit is an important feature to assess your health insurance. While usually presented as a fixed value for a specific illness or treatment, they can also be a percentage of the total sum insured. Most health insurance companies have two types of sub-limits on you; this can be on your hospital room rent and the sum assured for certain diseases.
Remember to ask your health insurance provider if you have the option to opt in/opt out of these sub-limits. Based on your budget, you can probably decide to choose one of the sub-limits but you will probably end up paying a higher premium. If you do choose the sub-limits, check to see if room rents and medical charges fall within the reimbursable limit at the hospital you plan to get your treatment.
Let's look at the two basic sub-limits:
Treatment or disease-specific sub-limit
Also called disease-specific sub-limits these are meant for common ailments and pre-medical surgical procedures. Disease-specific sub-limit can apply to common ailments and scheduled procedures. These include the removal of kidney stones and cataracts, surgery for sinus, tonsils, hernia, knee reconstruction procedures, piles and more. Many hospitals have sub-limits on doctors' consultation fees, anesthetists' charges, ambulance charges, oxygen supply, diagnostic charges, and many more. It is important to understand and check the types of diseases/ailments that are covered under a specific sub-limit clause along with the monetary cap and treatments as these can vary from one insurer to another.
Also, you may be offered sub-limits for pre and post hospitalization expenses as well.
Irrespective of the sum assured, treatment for the particular condition cannot exceed the particular sub-limit. Let's say you have a sub-limit clause of 50% for your cancer treatment and your sum assured is INR 10 lakh, then you won't be able to claim more than INR 5 lakh because of the sub-limit clause.
Hospital Room Rent Sub-Limit
This is the second type of sub-limit you will come across. Here, your insurance product will cover the hospital room rent per day but only up to a certain limit. The type of room you choose and the services provided in it also makes an impact on the sub-limit.
For instance, if you are going for a general room, it will be covered under the general plan. In case you choose a private room with elite services, you will have to pay more for that. Every insurance product will have a cap on room rent sub-limit.
So if your policy has a cap for room rent at INR 4000 per day and you choose a room with a rent of INR 6000 per day, you will have to pay the difference of INR 2000. Hospital charges are also included in the room rent, depending on the type of room you choose. It is best to discuss the sub-limit clause on room rent before opting for it.
Why do health insurance providers fix sub-limits?
The main reason is to reduce the overall claims and limit their liability on paying their customers. Costs and estimates of charges for sub-limits are made based on the prevailing rates in hospitals. They do this to moderate fraud and to stop customers from presenting them with inflated bills. Currently there are no regulations by the IRDA (Insurance Regulatory and Development Authority) on sub-limits in health insurance policies offered in the country.
The bottom-line
Make sure you understand the sub-limits of the health insurance policy you choose. Clear any doubts with the insurance provider before you sign up. Remember the following points:
- No sub-limits means higher premium compared to a policy with sub-limits.
- Pick your policy depending on your budget, but bear in mind that a plan with sub-limits could mean limited coverage.
- Check the sub-limits applicable to you. If the actual coverage does not meet your needs, perhaps consider increasing your sum insured.
- Spend time understanding your policy document and co-payment options. These are a fixed percentage of your claim amount that must be paid by you.
- Check the list of exclusions. Talk to your insurance provider about anything you don't understand.
- And of course, it goes without saying that it makes sense to seek treatment from a hospital listed in the insurance provider's network as these very likely match the sub-limits your insurance policy includes.
Doing the research can protect you from feeling cornered when faced with a medical emergency.