Know Sub-Limits In Your Health Insurance Policy – Here Is Why?
A health insurance policy is inevitable these days as it offers you adequate coverage against various diseases, including the COVID-19. Health insurance also provides the utmost financial protection to a person in case of any untoward situation. Sub-limits in health insurance are caps that are applied by health insurance companies. Due to this sub-limit, policyholders are not permitted to raise a full claim on their health policies. Sub-limits are mentioned in health insurance terms and conditions and will only enhance your health insurance out-of-pocket limit.
What are sub-limits in health insurance?
Sub-limits are a condition in your health insurance policy when the insurance company bears the expenditures related to a health condition only up to a certain limit. After that, the policyholder needs to pay the remaining bill amount from their pockets. But you must remember that the sub-limit is not applicable to the entire bill amount. Sub-limits are only applicable to certain conditions, like room rent or on the treatment of certain diseases.
Let’s understand more about sub-limits with the example of Mr. Avinash.
Mr. Avinash purchased a health insurance policy with a sum insured of Rs. 5 Lakh. Under his policy, the sub-limit on room rent was 1% of the sum insured amount. So, Mr. Avinash could claim Rs. 5000 per day for room rent in the case of hospitalization. While admitted to the hospital, Mr. Avinash selected a twin-sharing deluxe room that cost Rs. 6000 per day. Once he made a reimbursement claim, the insurance company offered Rs. 5000 per day as per the clause of sub-limit. Mr. Avinash paid the remaining Rs. 1000 per day from his pocket for the time he was hospitalized.
Different types of sub-limits
Let’s take a look at various types of sub-limits.
- Sub-limit on room rent
This is the most common sub-limit imposed by health insurers. Most health insurance companies usually pay 1% and 2% of the sum insured for room rent and ICU charges, respectively. If the insured policyholder selected a room that surpasses the rent covered in the policy, then the policyholder needs to pay the balance amount from his/her pocket. Apart from the sub-limit on room rent, there will be a cap on associated services like the doctors’ consultation fees, anesthetists’ charges, diagnostic tests, etc. So, a policyholder should choose a room that is solely covered under your health insurance policy plan, even with sub-limits.
- Sub-limit on treatment
Most health insurance companies embrace policyholders with sub-limits for pre-planned healthcare treatment procedures such as cataract, knee ligament reconstruction, kidney stones removal, tonsils, sinus, etc. For these kinds of surgeries or treatment procedures, companies usually offer a fixed amount according to the geographical locations. The list of diseases and cap on treatment costs will vary from company to company. The sub-limit on treatment is different from the sum insured. If a person selected a higher sum insured policy, he can’t claim the entire treatment amount because of the sub-limit clause in the policy. Policyholders should consider all sub-limits clauses before going for pre-planned medical procedures. Before admitting for a pre-planned medical treatment procedure, the insured policyholder must inform the company or the third-party administrator. Under any emergency (COVID-19 or coronary artery disease), no sub-limits for treatment are applicable.
- Sub-limit on hospitalization
Under many scenarios, policyholders need to take complete rest by staying at home under medical attention and supervision after the treatment. Many insurance companies often bear the costs of post-hospitalization expenses with sub-limits. This implies the policyholder needs to pay a certain part of the expenses from his/her pocket according to the terms and conditions of the policy. A customer should purchase a policy where the health insurance limits are explained.
How to avoid or take protections against sub-limits?
Since insurers decide sub-limits hence, before opting for a policy, you should check these thoroughly. You may consult with the health insurance company and get a better idea of sub-limits for each condition. Also, ensure that the health insurance company should compensate at least the expenses that are below sub-limits.
How do sub-limits affect your claim?
Sub-limits lessen your claim amount. Since insurers have capped for certain conditions like room rent, treatment for certain diseases, or post-hospitalization expenses, policyholders can raise a claim only for the amount below a sub-limit. If you opted for a higher sum insured policy, you can request your insurer to extend the width of sub-limits.
Importance of Sub-Limits in Health Insurance Policy
Sub-limits in health insurance are pivotal factors as they will weigh whether the policy will be suitable for your healthcare needs or not. Sub-limits are common for all health insurance policies. Some insurance companies enforce a sub-limit on the policy and even allow policyholders to opt-in or out of this clause as per their wishes. You must remember that if you choose a policy with no sub-limits, your premium will be on the higher side as compared to a policy with sub-limits. By evaluating your requirements and considering your budget, purchase a health insurance plan.
By visiting an insurer’s portal, you can see sub-limits for your online health insurance policy. If you purchase a policy online, it will minimize your premium as everything is online; hence, the company doesn’t need to pay the commission to agents, and it can also avoid its operational costs.
Before purchasing a new health insurance policy or renewing your existing one, ensure that you choose a policy with no sub-limits. To avoid limited or restricted coverage, especially at a time of this deadly COVID-19, go through the policy details carefully and choose a policy that gives you the best coverage with minimal sub-limits.