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What are Sub-limits in a Health Insurance Policy?

Sub-limit is a monetary cap that your insurer places on your health insurance claim.

  • 15 Apr 2015
  • 1 min read

A: "Hey! I heard you are going to Switzerland with your family next month."

Know your policy before you pick it

B: "I wish! A financial crunch made me cancel it. My wife was hospitalized for kidney stones, and the medical bills went through the roof!"

A: "Sorry about that. But, aren't you all covered by health insurance?"

B: "Yes, we have a family floater policy of Rs. 5 lakh."

A: "Surely, the hospitalization cost wasn't more than that?"

B: "No, it was much less than the policy cover amount."

A: "Was your claim not approved?"

B: "The claim was approved. However, due to sub-limits I had to bear a large portion of the hospital bill myself."

A: "I thought treatment costs for all covered diseases get approved if it doesn't exceed the policy cover amount."

B: "I thought likewise too, until I came to know of sub-limits."

A: "What are these sub-limits?"

B: "Sub-limit is a monetary cap that your insurer places on your health insurance claim. Due to medical complications, my wife's medical bill went up to Rs. 1 lakh. Our health policy had a sub-limit of Rs. 40,000 for treatment of kidney stones. Hence, I had to shell out the balance Rs. 60,000 from my pocket."

A: "That's a lot! Tell me, do these caps or sub-limits apply to specific diseases only?"

B: "No, there are sub-limits on hospital room rent, doctor's consultation charges, ambulance charges and a few common medical procedures as well."

A: "What kind of common medical procedures?"

B: "Your policy document will have a list of such procedures. These are usually pre-planned procedures like cataract removal, knee ligament reconstruction, etc."

A: "What about other types of illnesses and injuries?"

B: "Renowned insurance companies do not have a sub-limit for treatment of major illnesses like cancer and cardiac-related procedures. If required, you can opt for comprehensive plans with no sub-limits as well."

A: "Hold on! If my insurer can provide a zero sub-limit plan, why should I opt for one with sub-limits?"

B: "You can choose to opt for or opt out of sub-limits, depending upon your budget. While a plan with no sub-limits has a higher premium, a plan with sub-limits can reduce your premium amount. If you have a health cover with sub-limits, always remember to check if charges like room rent and medical costs are within the reimbursable limit before getting treated in any hospital."

A: "Now, that makes sense. Do you know how insurers calculate these sub-limits?"

B: "Sub-limits are usually expressed as a fixed value for a particular disease or treatment but can also be expressed as percentage of the total Sum Insured."

A: "I currently have an insurance cover of Rs. 4 lakh, but clearly my 'real' health cover is lower than that. What should I do to ensure I don't suffer a financial loss, like you did?"

B: "Firstly, enquire about the sub-limit clause in your existing health policy. In case you feel that your coverage isn't adequate, as a next step, opt for upgrading the Sum Insured. Remember to read the policy fine print and look for co-payment and other restrictive options. Lastly, go through the list of exclusions before selecting a policy that best suits your needs and finances."

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