What is Sub Limit in Health Insurance?

When buying health insurance, certain factors need to keep in mind to avail the best possible coverage. Among all essential factors that you need to consider, one of them is sub-limit — one of the crucial elements but most underrated in a health insurance policy. Sub-limit needs to be evaluated while buying a health insurance policy. Nancy and her sister Kia bought a health insurance policy of INR 5 lakhs, each with the same benefits. After six months, Nancy and Kia met with an accident and had to be hospitalized. While Nancy was aware of her health insurance room rent sub-limit is INR 5000 per day; she opted for the same cost room as her allowance. But Kia bought the insurance because her sister insisted, and she was unaware of her room rent allowance. Kia opts for a room that costs INR 7000 per day. At the time of bill settlement after three days of hospitalization, Kia had to pay INR 6000 extra out of her pocket while the insurer paid Nancy’s entire three days hospitalization room rent. Kia was disappointed and asked Nancy what is sub-limit? Why does it sound complicated? Many policyholders like Kia have bought the health insurance policy because someone suggested it without knowing what is sub-limit in health insurance and why it is crucial. Let us understand about it in this article below.

What is sub-limit?

In a health insurance policy, sub-limit is the fixed coverage amount on a particular claim for a specific disease or treatment procedure. Sub-limit can be a specific amount or percentage of the sum assured. The health insurance companies mostly set the sub-limits on hospital room rent, ambulance, or on some pre-planned medical plans — cataract surgery, hernia, knee ligament reconstructions, retina corrector, dental treatment, etc.

What is sub-limit in health insurance?

Before buying health insurance, the policyholder’s most crucial list needs to be checked is the list of ailments covered in the sub-limit cap and how much it will be. A sub-limit is divided into two categorize:

The ailments specific sub-limits

The ailments specific sub-limits refer to standard pre-planned medical procedures such as cataract surgery, kidney stones, hernia, tonsils, piles, and many others. The monetary cap on the list of the ailments can vary from one health insurance company to another. For example, if the health insurance policy has a cap amount of INR 50,000 on cataract surgery, and the surgery cost is INR 70,000, the insurer will only pay INR 40,000. The rest amount of INR 30,000 needs to be borne by the policyholder. Even though the sum insured can be high, there can be a condition for specific ailments where the policyholder cannot claim the entire amount due to the sub-limit clause. For example, for cancer treatment, there is a sub-limit clause of 50%. Even if the policyholder’s total sum assured is INR 10 lakh; still, the policyholder cannot claim the amount of more than INR 5 lakh for the treatment due to the sub-limit clause mentioned in the health insurance policy the policyholder has chosen.

Hospital room rent sub-limits

In most health insurance policy plans, the sub-limit caps on hospital room rent and ICU are 1% and 2% of the sum insured, respectively. Different hospitals offer different room packages depending on the type of room the patient is choosing. For example, if you have a health insurance policy plan with a sum assured of INR 5 lakhs, you can opt for a hospital room of INR 5000 per day. If you choose the higher hospital room, you need to bear the extra amount of expense. Similarly, the ICU sub-limit will be INR 10,000. Policyholder sum assured: INR 5,00,000 Room rent sub-limit: INR 5000 per day Actual Room Rent: INR 6000 per day No. of hospitalization days: 5 days

EXPENSE	ACTUAL BILL	REIMBURSED
Room Charges	INR 30,000	INR 25,000
Doctors Visit	INR 20,000	INR 12,000
Medical Test	INR 20,000	INR 12,000
Surgery Cost	INR 2,00,000	INR 1,20,000
Medicines	INR 15,000	INR 15,000
Total	INR 2,85,000	INR 1,84,000

Many health insurance policies also have a sub-limit on post-hospitalization expenses such as medicines, tests, doctor visits, etc. The policyholder can claim once he/she is discharged from the hospital. Also read up on meaning of copay in health insurance.

Below are some frequently asked questions asked by a policyholder about sub-limits in health insurance policy:

Why is it mandatory to put a sub-limit clause in health insurance policies? Putting a sub-limit clause in the health insurance policy ensures that the policyholder will use their policy fairly. Thus, it prevents the policyholder from overspending on unnecessary medical services simply because the insurance company will pay for them. If a policyholder opts for a family floater health insurance plan, are there any sub-limit clauses in it? Yes. Family floater health insurance plans have a sub-limit. Generally, the insurer puts the sub-limit on maternity expenses.

Final Thoughts

Health insurance companies fix sub-limits to decrease the policyholder's overall claims and limit its liability to pay the policyholders. Comparing the sub-limits while choosing the health insurance plan is essential to ensure a hassle-free claim procedure during medical emergencies. A health insurance policy that has no sub-limits has a higher premium amount.   *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.