All about Sub-Limits in Health Insurance

Almost everyone nowadays has health insurance. There are simply so many options that picking one is easy. However, with so many options available, selecting the right health insurance can be tricky. With various options out there, how do you choose the one that's best for you?You can compare health insurance plans based on the features they offer. These include waiting periods, day care procedures, co-payment, and deductibles. The key deciding factor, however, should be the presence of a sub-limit.

What exactly is a Sub-Limit?

Sub-limits are the extra limitations in an insurance policy's coverage. Though a health insurance policy offers the coverage for up to sum assured, the insurer can limit its liability in specific cases. For instance, you may have health insurance coverage of Rs 15 lakh but the policy has a sub limit of Rs 10,000 for specific ailments, say cataract. In this case, the insurer will offer coverage for only up to Rs 10,000 in case of cataract operation.

What are the Different Types of Sub-Limits?
There are two types of limits that insurers place; the first is on the hospital room rent, while the second is on the sum set aside for specific diseases.

Room rent is typically expressed as a percentage of the sum assured. It's usually 1%, but this varies from plan to plan. For instance, if your sum assured is Rs 2 Lakh, you're eligible to stay in a room with a tax of Rs 2,000. If you choose to be hospitalised in a more expensive room, however, the insurer will not pay the additional room rent—the cost has to be borne by you.

Okay, so?
A majority of health insurance customers are comfortable with the kind of sub-limit we just talked about.If the excess room rent per day comes to Rs. 2,000 and the hospital stay is for five days, you'd have to pay Rs. 10,000 on your own. Since the health insurance company is paying on your behalf in lakhs, it's not that big of a deal to be paying Rs. 10,000 from your own wallet.

Or is it?
Hospital charges are linked to the type of room you're staying in. Based on this information, they charge you on what they see as your ability to pay. The hospital may employ the same procedure, same operation theatre, same instruments, and the same doctors—but the charges will differ in accordance to the room you're staying in.

Say you've come to a hospital to undergo an appendectomy. The surgical procedure may cost you Rs. 25,000 if you stay in a twin-sharing room, but Rs. 50,000 if you stay in a single room. Similarly, a doctor's visit may cost you Rs. 1,000 in the twin-sharing room, but cost you Rs. 2,000 in the single one.

How does this affect my Health Insurance Claims?
Since the hospital charges are related to the type of room you stay in, the difference between the two bills (the twin-sharing room bill and the single-sharing room bill) is not just restricted to difference in room rent.

And insurance companies are well aware of this.
If your health insurance plan lacks sub-limits, the insurance company has no option but to cover everything.Yet, if your health insurance plan does have a room rent sub-limit, the insurance will cover your expenses in only proportionate amounts.

To continue with the example from above, if, at the end of your stay, you run a hospital bill of Rs. 5 lakh, the insurance company will only pay Rs. 3 lakh. Everything except medicines will need to be paid in proportion (medicines are charged at MRP). To better understand this example, take a look at the following illustration:

In the end, you end up paying more than the excess room rent.Nobody wants to get ripped off. With the vast variety of health insurance policies that are available on the market, it's as easy to choose one that's unreliable as it is to choose a good one. Through a good health insurance plan like, you're bound to get a comprehensive cover without hassles. Staying healthy is crucial to living a happy, long life. Don't rush decisions when it comes to your health, and choose a plan with a sub-limit you can live with.