Covid-19 has made people aware that health emergencies can strike without warning. Further, with sky-rocketing medical costs, having adequate health insurance has become a necessity. Among the various factors that you must pay attention to while choosing health insurance, is sub-limits.

What they are

Sub-limit in health insurance refers to a monetary cap by an insurer on expenses against treatment of diseases/ illness, room rent and post-hospitalization and pre-planned medical procedure related expenditures. This means that the insurance company will only bear expenses up to a predetermined limit. Anything beyond that will have to be borne by the policyholder.

The sub-limit, however, varies across claims. It may be a certain percentage of the sum insured, or up to a certain specific amount. For instance, generally ICU fees and hospital room rent caps are typically 2% and 1%, respectively of the total sum assured. Further, many health insurers allow you to opt out of sub-limits for an additional premium. You can choose between the two options depending on your budget.

Sub limit types

Disease-specific: Most insurers have sub-limits on pre-planned medical treatments, in the form of a defined cost for procedures such as cataract removal, knee ligament reconstruction, kidney stone removal, tonsils, and sinus removal. The list of ailments and the treatment cost cap differs from one insurer to the next. The treatment sub-limit is not related to the sum assured, which means that even if a policyholder has a high amount assured, the sub-limit clause in the policy will prevent him from claiming all of his treatment expenses. For instance, if your policy has a 50% sub-limit clause on a certain medical procedure and your total sum insured is ₹5 lakh, you will be unable to claim more than ₹2.5 lakh for that treatment because of the sub-limit clause.

Room rent: This refers to the maximum rent or room category you are entitled to depending on your health insurance coverage. This is usually 1% of your entire insured. For instance, under a ₹10 lakh policy with a 1% sub-limit on room rent, the insurer will approve a hospital room with a maximum rent of ₹10,000 per day. If the room rent exceeds the set sub-limit, the policyholder will have to bear the rest of the cost.

There will be a cap on associated services such as physician consultation fees, anaesthetists’ charges, diagnostic tests too, because various hospital expenses are tied to the type of room one chooses and as per the sub-limit applicable on room rent.

Post-hospitalisation: In many circumstances, policyholders will be required to stay at home under medical supervision for a certain period after treatment. Many insurers cover post-hospitalisation charges with sub-limits, requiring policyholders to pay a portion of the cost.

When compared to a policy with sub-limits, health insurance policies with no sub-limits will have a higher premium. If you have a sub-limit cover, make sure that your medical expenses do not exceed the threshold level. So, before you buy a new health policy or renew an existing one, be sure to get one that covers you adequately.

The writer is Head- Health Insurance, Policybazaar.com

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