Sub-limits in a health insurance policy

                    

Before one buys a health insurance policy, it is essential to understand the coverage and sub limits of the policy. One must check the list of diseases/ailments which come under the sub-limits clause and the coverage limit specified against each of them in the policy. One should make a  detailed analysis of the  sub-limits under different health plans and purchase  the  correct health insurance plan that suits one’s budget and requirements. It is important to understand the intricate details in the policy wording, especially sub-limits, in order to make  an informed decision when buying a policy.

What are sub-limits in a policy?

A sub-limit is a limit within the sum insured of  a health  policy coverage  on certain medical expenses. Insurance company can limit its liability  by incepting sub-limits. Sub limit is laid for  particular illness/disease/treatment and  can also be included as a percentage of the total sum insured.

There are caps and limits for specific treatments or medical procedures, room rent, doctor’s fees, consultation fees etc. which make up the sub-limits of an insurance policy. Sub-limits will apply for a few  medical procedures, such as cataract removal etc.

Specific treatments or medical procedures: Pre-planned procedures like plastic-surgery, medical conditions like high blood pressure kidney stone, cataract, piles, gallstone, hernia, tonsils, knee ligament reconstruction, sinus, etc. are subject to sub-limits. The insurance company places a coverage limit on the total treatment cost of specific medical procedures. Even though sum insured may be high, the entire  claim for hospitalization expenses may not be paid/reimbursed due to the sub-limit clause on specific medical procedures.

Hospital room rent: This limit is for a hospital room per day during an insured's hospitalization. This means that, in the event of a hospitalization , if the cost of the room exceeds the set limit, the insured will have to pay the difference out of his /her pocket.

Doctor’s consultation fee: Consultation fee of specialists, cardiologists etc. are sub limited in the policy. So if the doctor's fee is in excess of the sub limit the difference has to be paid by the insured.

Sub-limit on pre or post hospitalization: Some health insurance providers also include sub-limits for pre and post-hospitalization expenses. If your policy covers pre-hospitalization expenses (eg. for diagnostic tests), and post-hospitalization expenses (eg. Medications, therapies, or tests during recovery), these may also be subject to a sub-limit. 

Why are sub-limits important in a health insurance policy?

• Sub limit is crucial to a health policy as premium varies with sub limits and  this helps the insurance company reduce their liability. From the customer’s point of view it helps getting  basic medical insurance cover with lesser premiums.

• A health insurance policy without sub-limits allows customers to avail coverage up to the sum insured limit as there is no need to check for the limits per head in the policy.

• Some companies also provide the policyholder with the option to opt for or opt out of sub-limits.

Can the sub limit be altered at renewal ?

This depends on the claims experience of the insured and the decision of the insurance company.

How do sub-limits affect claims? 

As we have seen above, when there is a sub-limit, it reduces the final claim amount. For things like hospital room rent, treatments of certain diseases, or post-hospitalization charges, you can only make a claim for the amount set out by the sub-limit clause, and beyond that, you need to pay out of your own pocket. Thus, even though you might have a high sum insured, you may not be able to claim for all of your hospitalization or treatment expenses due to these sub-limit clauses. Remember to go over these sub-limit clauses carefully to avoid any last-minute confusion during the stressful time of hospitalization or while filing a claim. This way you can ensure that you enjoy a hassle-free claims process.

Can the sub limit be altered at renewal ?

This depends on the claims experience of the insured and the decision of the insurance company.

It is prudent to understand the policy and  buy a health insurance policy with sub-limits or without sub-limits as per one’s  budget and health coverage needs. Health insurance companies use sub-limits to decrease the overall claim made by the policyholder and cut down on their payment liability. It is best to compare the sub-limits in different health insurance policies before choosing one. Also remember, a health insurance policy with no sub-limits entails a higher premium amount.

Disclaimer:    

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products.