Sub-limits on health insurance can make your policy benefits insignificant

Take the case of Hanu Shukla, a Lucknow-based advertising government, who purchased a health policy with maternity profit cowl with sum insured of 10 lakh round 5 years in the past. He had even paid a premium of 61,000 ( 12,200 every year) thereafter. But, after his spouse Neeshu Tripathi was admitted to a hospital for the supply of their first youngster, Shukla discovered that he was solely eligible for a reimbursement of 50,000 in direction of maternity benefits. The policy had a sub-limit on the general sum insured for maternity benefits. There are many subscribers like Shukla who’re unaware of the sub-limits and have needed to shell out cash for therapy prices when their insurance claims transcend the sub-limits.

Sub-limits in health cowl

“Several insurers typically impose a compulsory co-payment and sub-limits clause on the health cowl while you purchase a policy to scale back the premium. While this may occasionally cut back your premium to some extent, it would price you dearly while you file a declare,” said Venkatesh Naidu, CEO of Bajaj Capital Insurance Broking Ltd.

Sub-limit: This is the term used by insurers for a monetary limit on expenses for disease/illness treatment, room rent, post-hospitalisation, and pre-planned medical procedures. In such a case, the insurer will only cover costs up to a specific limit; the policyholder must cover expenses above that limit.


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Do note that sub-limits can vary, depending on the policy and the insurer. It could be a percentage of the total amount insured or up to a certain amount specified by the insurer. For instance, ICU fees and hospital room rent are generally capped at 2% and 1%, respectively, of the total sum assured.

Biresh Giri, executive vice president and appointed actuary at ACKO insurance, said, “Typically, in health policies, non-medical expenses (consumables) are not covered but this often makes up about 15-20% of the medical bill. Besides, the capping on room rental cost is generally at around 2% of the sum insured. So, subscribers need to check whether the insurer covers non-medical expenses in their policy term. If the policyholder exceeds the insurance coverage, they must bear the difference from their pocket.”

Higher sub-limits: There are insurance covers with increased sub-limits, relying on the particular therapy pertaining to cataract surgical procedure, knee substitute surgical procedure, maternity, and so on. “The bills for cataract surgical procedure are normally capped at 24,000 and that for maternity and oral chemotherapy at 50,000,“ stated Yashendra Sharma, head-employee benefits at Alliance Insurance Brokers.

However, hospitals can invoice you as much as 1.5 lakh for cataract surgical procedure or maternity admissions, which implies you might need to bear greater than two-thirds of the associated fee from your pocket.

Regulatory norms: The Insurance Regulatory and Development Authority of India (Irdai) has not issued any particular rules for sub-limits in a health policy. Also, not all health insurance insurance policies include a sub-limitclause. A number of insurers impose sub-limits, whereas some others cost a substantial premium to take away the boundaries. Sharma stated the choices on sub-limits are primarily taken by insurers. “Irdai, nonetheless, has requested insurers to pay for some listed procedures that hadn’t been coated earlier within the health policy,” added Sharma.

Why sub-limits? “One of the main goals of sub-limits is to help insurers decrease their overall claims while underwriting health policies. Secondly, it also decreases their liability limit and the payments to be made to the policyholders,” stated Sharma.

Ankit Agrawal, CEO and co-founder of, stated, “Sub-limits are fastened by health insurance suppliers to scale back the possibilities of false claims filed by the policyholders and to make sure honest utilization of the protection supplied.”

While insurers evaluate such parameters to impose sub-limits on the treatment cost of several surgeries, you must know that policies with sub-limits bought for planned surgeries may not be advantageous at any cost.

For instance, some policies may not benefit newly married couples because they have a four-year waiting period to cover maternity care and allow expenses up to a maximum of 50,000 per policy, subject to terms and conditions.

So, if you buy a policy with 10 lakh sum insured, you will roughly have to pay a premium of 50,000 (including taxes) by the time your policy’s waiting period gets over. Moreover, the policy will not be applicable in case you get hospitalized for childbirth within four years of the waiting period.

Mint take: You should choose a health policy by comparing different policies online or take an advisor’s help to select one. You must avoid buying a health policy with specific procedure sub-limits.

Before purchasing a health insurance policy, you should carefully study the policy paperwork and consider various factors, including co-payment choices (where you must pay a predetermined portion of the claim amount) and the list of exclusions. It would help if you also familiarize yourself with the alternatives for “limits,” “deductible,” and “co-pay” in your health insurance policy.

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