Health Insurance Sub-Limits – All You Need To Know

Rahul had a comprehensive health insurance policy for which he was paying an annual premium of Rs 15000. He had the policy for over four years. In the fifth year, he was hospitalized for a surgery, which cost Rs 60,000. 

When he filed the claim for Rs 60,000, he was in for a shock. It was then that he learnt about the sub-limit clause in his health insurance policy. Rahul’s health insurance policy had a sub-limit clause – a cap of Rs 25,000 on any kind of surgery, which meant that the insurer would pay only Rs 25,000 irrespective of the amount of total claim made. 

Certainly, Rahul is not alone. Like Rahul, there are many who aren’tfam aware of sub-limits in health insurance plans. What is sub-limit and how does it affect the insured? Do all health insurance policies have sub-limits? We’ll look at all these questions and more, in detail.

  • What is sub-limit in health insurance?
  • What are the different types of sub-limits?
  • How do sub-limits affect the policyholder?
  • Health plans with sub-limits – to buy or not to buy?

 Related: A Layman’s Guide to How Health Insurance Works

What is sub-limit in health insurance?

A sub-limit is a cap or limit on an insurance claim. Sub-limits are pre-specified in health insurance policies if you read the fine print of the contract. Sub-limits are either specified as a fixed amount or a percentage of the sum insured. 

Typically, sub-limits are placed on claims towards expenses such as room rent, certain types of surgeries such as knee and cataract, among others. In short, sub-limit is a way in which health insurance companies limit their liabilities to policyholders. 


What are the different types of sub-limits?

There are two key types of sub-limits.

Sub limit on diseases/treatments

Insurers often have sub-limits on certain diseases or treatments. Some of these are cataract operations, knee surgeries of certain types, kidney stone, tonsillitis, and piles. It is important to check the sub-limit clause in a health plan before purchasing it, so as to avoid buying a policy with too many sub-limits. 

For example, if there is a sub-limit of 40% on a kidney stone surgery, and the cost of the surgery is Rs 1 lakh, the insurer would pay only Rs 40,000. The policyholder would have to shell out Rs 60,000 from his own pocket.

Sub limit on room rent, ambulance, doctor’s fee

Insurers have sub limits on expenses such as room rent, ambulance charges and doctor’s fee. Typically, insurers have a sub limit of 1% to 2% of the sum insured. Most times, this may lead to the policyholder paying a huge amount from the claim. 

E.g. If the room rent in a hospital is Rs 2000 per day, with a sub limit of Rs 1000 per day, hospitalization for 10 days would mean the policyholder would have to shell out Rs 10,000 from his own pocket. 

Hospital room rents also depend on the treatment, medical equipment required, and other factors. These could form a significant portion of the total bill. It is advisable to check how a sub-limit clause could affect these costs before buying a policy.

Apart from the above, there is one more kind of sub-limit, which is the post-hospitalization sub limit.

Post-hospitalization sub-limit

A policyholder may incur healthcare expenditure post hospitalization such as pharmacy bills, diagnostic tests and doctor’s visits, among others. Health insurance companies might have sub-limits on post hospitalization expenses, too.

How do sub-limits affect a health insurance policyholder?

Out-of-pocket expense

A sub-limit would affect the claims made by a policyholder. The insurance company will accept claims only within the sub-limit amount mentioned in the policy. The policyholder would have to pay the amount above the sub-limit from his own pocket.

It is a policyholder’s responsibility to understand sub-limit clauses so as to avoid any nasty surprises at the time of making claims. Normally, health insurance policies with a higher sum insured might not have a sub-limit clause. Hence, it is advisable to buy policies of a higher sum – Rs 8 lakh to Rs 10 lakh. 

Premium amount

A health insurance policy with a sub-limit clause might come at a lower premium. Hence, a policy with sub-limits could make sense for those who have a smaller budget. However, policyholders should keep in mind that this would increase the amount of money they would have to pay on their own in case of hospitalization or treatments.

Charges linked to room rent

Hospitals charge for doctor’s fee, operation theatre and anaesthesia, among few other costs, according to the room rent. E.g. costs for the above-mentioned services taken in a private room costing Rs 5000 a day, would be more compared to a shared room costing Rs 2000 a day. At times, insurers apply a proportionate deduction clause based on the room rent sub limit clause. 

Health plans with sub-limits – to buy or not to buy?

Experts suggest it is better to avoid buying health insurance plans with any sub-limits. The reasons: it increases the out-of-pocket expenditure significantly and it might make calculations and claims process complicated. At times, if a policyholder wrongly claims an amount, the insurer could reject the claim. It is best to avoid health plans with sub-limits to the extent possible to avoid any last minute surprises.


FAQs: Health Insurance Sub Limit

What is sub-limit in health insurance?

A sub-limit is a cap or limit on an insurance claim. Sub-limits are pre specified in health insurance policies. Sub limits are either specified as a fixed amount or a percentage of the sum insured. 

Are there sub-limit clauses in family floater plans?

Yes, family floater health insurance plans can have sub-limit clauses, too. Insurers often have a sub-limit clause on maternity insurance. 

How is sub-limit calculated?

The sub-limit amount is either specified as a percentage of the sum insured, e.g. 1% to 2% of sum insured or a fixed amount, e.g. Rs 1000 or Rs 15,000.

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