In times of medical contingencies, a health insurance plan will take care of the expenses arising from the treatment and hospitalisation of the concerned individual. The primary purpose of buying a health policy is not to utilise the savings in such emergencies. Since you are paying premiums timely on your health insurance plan, you expect the policy to cover the medical bills in times of need.
Nowadays, insurers provide cashless claim settlements when seeking treatment at a network hospital enlisted by them. However, there have been instances when the policyholder had to bear a percentage of the claim amount from their pocket. The reason for this to happen is due to the health insurance clause, ‘sub-limit’.
Sub-limit in health insurance defines the maximum amount your insurer is liable to pay for various medical expenses such as room rent, doctors fees, etc. during your hospitalisation. While the sum insured amount in your health plan defines the amount your insurer will reimburse, the sub-limit is the internal cap for other hospital expenses.
Sub-Limit on Room Rent
Typically, the room rent is specified at one percent of the sum insured amount. For instance, if your health plan with a sub-limit has coverage of Rs. 4 Lakh, then the room rent coverage will be Rs. 4000 (policy’s eligibility). But if the sum insured amount is Rs. 2 Lakh and the room rent is Rs. 4000, then you will receive 50% of the room rent (that is Rs. 2000) only based on your policy’s eligibility.
Much like the room rent scenario, all other hospital expenses are proportionally deducted as per the policy’s eligibility. That means you (the policyholder) will have to pay the remaining amount from your pocket. The insurer will not be liable to reimburse the amount that exceeds the sub-limit on your health insurance plan.
On the other hand, many health insurance plans in India do not have a sum-limit clause. However, the premiums of such policies will be comparatively higher to health plans with sub-limits. You can use the health insurance premium calculator to determine how much the policy would cost you. Based on the results, you can then make an informed decision when buying a health insurance plan in India.
What Should You Do?
Ideally, it is preferable to buy health insurance with no sub-limit clause. In case you still want to opt for a plan with sub-limits to reduce the premium amount, look for a health insurance policy that comes with reasonable out-of-pocket expenses.
For this, take into consideration the medical costs in your area, your income, your savings, and your health condition. Based on these factors, you can further decide whether you want to buy a health insurance plan with or without sub-limits.
Besides, also take the premiums charged on the policy, inclusions, exclusions, features, and benefits provided by the insurer, etc. before buying the health plan. That way, you and your family will be covered at all times in case of medical emergencies.