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Why is it important to check the sub-limits in your health insurance plan?

We always put in the required efforts to achieve financial stability in our life. But in the midst of our busy lifestyles, there is always the probability of being exposed to an unexpected illness or injury. Such health emergencies can impact all our savings. But Health Insurance Plans can be a smart way to deal with these health emergencies without negatively impacting our savings.

Sometimes, buying a health insurance policy may be an easy task. But choosing a policy that suits your needs and provides the best health cover to you and your family is slightly more complicated. There are numerous features such as co-payment, waiting period, deductibles, cashless cover, daycare procedure, and the sub-limits that affect your buying decision. In this article, we’ll dig deep into sub limit in health insurance and why it is important to check them to buy the best health insurance for yourself.

What exactly are sub-limits?

A sub-limit in health insurance is a monetary cap that is imposed by the insurance provider. It is a predetermined deduction charged by the health insurance provider on the total claim amount by the policyholder for specific medical conditions. These sub-limits are usually placed on doctor’s consultation fees, hospital room rent, co-payment clause, waiting period, ambulance charges, cataract removal, ICU charges; and the list can go on. Thus, it is very essential to check sub limit in health insurance for avoiding out-of-pocket expenses and select the best health insurance policy for yourself.

The question here is, why does a health insurance provider place such sub-limits? IRDA did not mention any specific guidelines on sub-limits in the health insurance policy. So, to reduce their liability to the customers, Insurance providers placed sub-limits. These sub limit in health insurance limit the ability of policyholders to make claims and thus reduce the liability of insurers. The top health insurance companies have the least restrictive sub limits in their health insurance plans.

Sub-limits: Are these mandatory in health insurance plans?

In most cases, a health insurance plan with no sub-limits would charge a higher premium amount as compared to the plan with sub-limits. In case, if you are not able to afford a plan without sub-limits, then you must ensure that your plan will reimburse before you get admitted to a hospital. Sub-limits are typically mentioned as a fixed flat amount for treatment of any specific disease/ illness or may be expressed as a proportion of sum assured for particular diseases. It is advisable to check the sub-limits of the particular plan before you sign on the dotted line. The best health insurance companies also provide you with an opportunity to choose a plan option as per your affordability suiting your requirement.

There are a few critical sub-limits in most health insurance policies:-

Sub-limit on Hospital Room Rent: Under Room Rent Sub-limits, the health insurance provider can limit its liability by providing sub-limits on room rent per day. This is either a fixed sum or a percentage of the sum assured. For instance, if your policy has a sub-limit to cover room rent only up to Rs.6,000 per day and your actual room rent is Rs.10,000 per day, then the difference of Rs.4,000 must be paid from your pocket.

In-room rent sub-limit, insurance providers restrict the type of room and include only the general room or the semi-private room in the policy. In case if you need a private room, then you need to pay that additional cost from your side. The room rent sub limits in health insurance are typically in every policy. So it is better to look for accommodation that won’t trigger these sub-limits throughout the hospitalization.

Co-payment clause: It is the percentage of the sum assured that you will need to pay from your pocket. The health insurance companies pay the remaining hospitalization expense. Suppose, if you have got a policy with a 10% Co-pay clause, this suggests that for a claim of Rs.2 lakh, you pay Rs.20,000 from your pocket while the health insurance firm will pay 90% or Rs.1,80,000 as the claim. Top health insurance companies keep their co-payment ratios low so that their customers won’t have to face sudden financial instability.

Sub-limits on specific treatment: The sub-limits on specific treatments are one more critical clause placed by the insurance provider. If you are deciding to buy health insurance with sub-limits, then you should check the list of diseases/ illnesses that come under this sub-limit and their respective costs associated. In most cases, hospitals consider sub-limits on the doctor’s consultation fees, ambulance charges, diagnostic tests, oxygen supply, etc. However, the top health insurance companies have very reasonable sub-limits that can be avoided easily. You cannot claim the entire treatment or hospitalization cost even if your sum assured is high.

Let us assume that the sub-limit clause for the cancer treatment is capped at 50% of the sum assured. If the total sum assured is INR 30 lakh, then the policyholder cannot claim more than INR 15 lakh because of the sub-limits clause. And the rest amount you have to pay from your side. These sub-limits usually impose on some common ailments such as kidney stones, cataracts, gallstones, sinus, and so on. This list of ailments and their respective monetary caps vary from one insurance provider to another.

Therefore, before you finalize the policy, you must go through all sub-limits clauses. Then choose the policy that satisfies your budget and requirements. Check all the sub limits in health insurance and select the best health insurance plan with least restrictive sub-limits on coverage.

Top tip: don’t ignore sub-limits!

It is very critical to compare the sub-limits of different health insurance plans as it helps in determining a favorable insurance policy. Before your final decision to buy any health insurance policy, it is very crucial to analyze all the parameters of sub-limits. In case, if you feel that insurance policy with sub-limits will not be able to cover your health care needs, then the best health insurance policy for your would be one without any sub-limits.

If you wish to have a hassle-free treatment and claim procedure, then you should avoid policies with too many restrictions such as sub-limits, deductibles and co-payments.

Importance of Sub-limits

What precautions should one take while buying a health insurance policy?

Before buying any health insurance policy, you should ask some questions to the insurance company. These should include:

1. Does it cover all the hospitalization expenses?
2. Does it also cover pre and post-hospitalization expenses and how many pre and post hospitalization days are covered in the policy?
3. Does it cover pre-existing diseases? Is there a waiting period for pre-existing diseases?
4. Does it cover day-care procedures?
5. How many hospitals are available in the Network list and what is your geographical proximity to these hospitals from your place of residence?
6. Is there any co-payment towards admission to non-network hospitals? If yes, how much is the co-pay, and will it get waived off on loading the premium?
7. Is there any family discount available in the policy?
8. Will you get a cumulative bonus at the time of your policy renewal?

Once you go through all the finer points that the insurance coverage offers, the details of the premium amount and the additional benefits cover, you can go ahead with the suitable policy.

How can a smoker get a health insurance policy?

A smoker can also purchase a health insurance policy. By disclosing all information without hiding any information on pre-existing diseases, smoking habits, or any prior surgery details, it can help the proposer to get a Health Insurance policy. Also, hiding facts is counterproductive in the case of Life Insurance and Health Insurance. In Life Insurance, smoking is considered to be a major negative factor while issuing the policy. Life Insurance companies may ask you to go for compulsory medical tests, and after that evaluate the condition before deciding on the policy.

What is a family floater health insurance policy?

A family floater health insurance plan covers all the family members under one single plan. The sum insured is fixed and gets exhausted as and when any member avails medical services and makes a claim. The policyholder, spouse, parents, and children are covered under a family floater plan.

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