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Understanding Sub-Limits in Health Insurance Plans

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Health insurance selection can often get confusing with the various jargons used. While this may be a general notion, an understanding of the terms can help you make a smart selection of the policy when understanding the jargons. One such jargon used is the sub-limit.

What is a sub-limit in health insurance? 

Sub-limits in health insurance are limited coverage offered by the insurance company for a specified expense. Due to this, you may not be able to claim the entire amount of expense owing to the sub-limit defined in your policy terms. Any amount over the sub-limit shall be required to be borne by you and thereby increasing the out-of-pocket expenses at the time of an insurance claim. While sub-limits are applicable in most insurance plans, you must note that they are not applicable on the entire bill amount, instead, they are limited to certain types of expenses like room rent or health check examination.

An example of sub-limit: Mr Rakesh has a family health insurance policy with a sum insured of ₹6 lakhs. This policy has a sub-limit for room rent charges at 2% of the sum assured. For a recent hospitalisation, the room rent charges were billed at ₹15,000. Since there was a cap at 2% of the sum assured for room charges, the balance of ₹3,000 had to be borne by Mr Rakesh.

What are the types of sub-limits?

Sub-limits are not blanket limits but based on various conditions. Let us look at the types of sub-limits that can be found in your policy terms.

Disease or treatment specific sub-limit: As the name suggests, these sub-limits are applicable based on the disease or treatment availed by you, the policyholder. There are a few ailments that are commonly occurring among people like a kidney stone, cataract, gallstone, hernia, sinus, etc. Your insurance plan may specify coverage up to a specified amount for these treatments.

Sub-limit for hospital rent: It is the most common sub-limit found in the majority of insurance plans. It is generally capped at a specified percentage or a fixed amount depending on the terms of your policy. The common types of capping are for room rent, ICU charges, oxygen supply required during treatment, consultation charges, ambulance charges, and even diagnostic tests. Since the stay of the patient is separately billed by the medical facility, these charges come into play. Also, you have the option to avail of different types of rooms at the hospital depending on your preference.

Post-treatment sub-limits: Some treatment or major hospitalisation may require you to avail treatment even after being discharged. If your insurance cover has post-treatment sub-limit, it limits the maximum expense covered by your insurance company after the hospitalisation. Any additional expense over and above this amount shall be borne as an out-of-pocket expense.

How to be cautious about sub-limits?

Since the sub-limits are decided by the insurance company for each policy, you must thoroughly understand them before making a purchase. Reading and understanding the policy terms concerning sub-limits is thus essential to not incur additional expense at the time of insurance claim.

Now that you understand sub-limits in health insurance, be mindful when buying health insurance for senior citizens, individuals or even your family. These sub-limits can at times make it expensive to file an insurance claim. On the other hand, if used smartly, it can benefit you to a great extent.

 

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