Is It Worth Buying Health Insurance with Sub-Limits?

While buying a health insurance, there are various features which we ascertain to select a plan that best fit our needs. The main deciding factors are coverage for daycare procedures, co-pays, deductibles, waiting period, cashless cover, and last but not the least, the sub-limit imposed.

A ​sub-limit in health insurance is a predetermined monetary cap that an insurer imposes on payment of claims arising from associated medical expenses. Sub-limits are generally placed on room rent, ICU charges, doctor’s consultation fees, ambulance charges, oxygen supply, diagnostic tests, and a few pre-planned procedures such as plastic surgery, cataract surgery, tonsils, hernia, piles, and knee ligament reconstruction, among others. These sub-limits vary from one insurer to another.

When buying health insurance, you should be careful about the sub-limits in the policy. Sub-limits can be a percentage of the sum assured or a specific amount as specified by the insurance company. It is to be noted that irrespective of the sum assured, the insurance company does not pay for treatment exceeding the particular sub-limit. If the treatment expense is more than the specified amount, then it is to be borne by the policyholder.

Sub-limits are placed by the insurance companies to reduce their liability to pay to their customers. The insurance companies make estimates based on prevailing rates charged by the hospitals to mitigate fraud and to decrease their own overall claims outgo. There are no specific guidelines set by the IRDA on sub-limits in health insurance policies. However, many insurers provide you with the flexibility to choose a plan without a sub-limit by paying an extra premium. The policy without sub-limits generally cost more than the one with sub-limits. But, it is to be noted that the health insurance plan with sub-limits provides limited coverage. As per your affordability, you can opt for the plan that suits your requirement.

List of a few sub-limits in a health insurance policy:

1. Room rent sub-limit

Under the sub-limit for room rent, the insurance provider will provide sub-limit on per day room rent up to a certain specified amount or a certain percentage of the sum assured. Thus, if the room rent cap is set at Rs. 3000 per day and you choose for a room that costs Rs. 6000 per day, then, in that case, you will have to pay the difference of Rs. 3000 from your pocket. In some instances, the room type is also capped.

The insurer may provide the coverage only for the general room or semi-private room. If you want to avail the stay in a private room, you will have to bear the cost of the room. Also, various hospital expenses are linked with the type of room you choose. These include expenses like surgical procedures, doctor’s consultation fees, nursing charges, operation theatre charges, etc. These expenses increase the cost of the room, and the sub-limit imposed by the insurer poses difficulty to the policyholder. It is imperative that you discuss with your provider regarding the sub-limit clause to avoid any confusion during hospitalisation or filing up of claim.

2. Treatment-specific sub-limit

Another type of sub-limit clause set by the insurance provider is the treatment or disease-specific sub-limit. There is a list of diseases or ailments which come under the sub-limit clause. Before you undergo any procedure specified in the list, you must check the cost specified against each of them. This sub-limit is not linked with the sum assured. Even if your sum assured is high, you may not be able to claim your entire treatment expenses due to the sub-limit clause. For example, there is a sub-limit clause of Rs. 20,000 per eye for cataract surgery.

If the cost of the procedure exceeds this limit, the remaining amount is to be paid by the policyholder. These sub-limits are generally placed for common ailments and pre-planned procedures such as piles, kidney stones, hernia, sinus, tonsils, gallstones, cataracts, etc. The monetary cap on each of the treatments varies from one insurance provider to another. It is advisable before you finalize the policy keep in mind the sub-limit cost imposed on diseases/condition and to choose the policy that can meet the budget and the needs.

3. Sub-limit on post hospitalisation expenses

After discharge from the hospital, the policyholder incurs some post hospitalisation expenses. There may be a ceiling on such expenses also. The policyholder cannot claim the amount more than the sub-limit under such circumstances. To have a hassle-free claim, it is always advisable to go for the plan without any sub-limit. That way, you will be able to focus on the treatment instead of calculating the spending, according to the sub-limits mentioned in the policy.

4. Sub-limit on ambulance charges

There is a capping placed on the ambulance charges. These charges may vary from one insurer to another. The capping is based on the number of visits as well as the amount per visit. Others may provide a specified annual amount for ambulance transportation per year without any limit to the number of visits. There is a capping on the maximum amount that can be availed in terms of ambulance charges.

5. Sub-limit on maternity charges

There are few insurance providers who provide coverage for maternity, but it generally has a waiting period of three years or more. Also, there is a sub-limit clause on the amount allotted for maternity expenses. For example, Royal Sundaram Master Product- Total Health Plus- Platinum Plus pays 10% of the sum assured up to Rs. 50,000 as a maternity benefit (allotted for the first two children) after a waiting period of 3 years.

6. Sub-limit on daily cash (for accompanying an insured child)

Insurance providers also provide sub-limit on daily cash for the person accompanying the insured child. For example, Bajaj Allianz - Health Guard pays a daily cash benefit of Rs. 500 per day for a maximum of 10 days each year for accommodation expenses in respect of one parent/legal guardian to accompany a minor insured person. This coverage is provided if the claim is paid under inpatient hospitalisation treatment cover for policies with a term more than 1 year.

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Conclusion

Different insurance providers have different sub-limits and capping put on various aspects of health insurance. It majorly depends on the type of policy and the sum assured. Before buying a policy just as it is essential to analyze parameters like co-pays and exclusions, it is equally vital that you compare the sub-limit clause. If you feel that the actual coverage offered by the provider falls short of your healthcare needs, you should choose a policy without sub-limits. Furthermore, you should get admitted into a network hospital as the former’s rate structure is, by and large, in concordance with your insurance provider’s sub-limits. However, it is prudent to avoid opting for policies with a lot of restrictive options such as sub-limits, deductibles, and co-payments to have hassle-free hospitalisation and claim procedure.