Your money: know how sub-limits can affect your health insurance policy coverage


By Vikas Madhukar & Rishi Manrai

Most of us don’t read the offer documents for a health insurance policy and later blame the company for the denial/deduction of insurance claims. Most insurers apply sub-limits to the health insurance policy claim amount to limit their liability under certain coverages. It is important to note that, being part of the coverage limit of the original policy, these claims include the sum insured.

What are sublimits?

Sub-limits set a monetary cap on insurance services expressed as a fixed value for a particular condition included in the total sum insured. These limits generally apply to room rent, doctor consultation fees, post-hospitalization fees and a few planned medical procedures, such as knee ligament reconstruction, cataract removal, kidney stones , sinuses, etc.
A health insurance plan with sublimits, however, is more affordable compared to the plan without sublimits because they limit the liability of the insurance company. A health insurance plan with no sub-limits allows you to receive the benefit up to the value of the limit of the sum insured, freeing you from the stress of medical expenses such as room rental, medical expenses, etc. ambulance, etc.

Average expenses

Sub-limits are applied by insurers by estimating the average expenses of insurance claims under different headings (such as intensive care costs, treatment costs, doctor’s visit costs, anesthesia costs, etc.) .) looking at average hospital spending to mitigate fraud on inflated insurance claims.

In the absence of specific guidelines from the Insurance Regulatory and Development Authority of India (Irdai), this sub-limit varies from company to company. Due to the limited coverage of the policy, the under-limit can harm a person who is totally dependent on the insurance policy to pay for medical expenses. The claim can either be rejected or the policyholder will have to bear part of the expenses out of his own pocket.

Insured persons should check their individual medical needs as well as the budget, especially if there is a family history of any disease. This will help policyholders plan for their medical needs and mitigate policy premium liabilities. In the event that policyholders find that the actual coverage is insufficient to meet the stated requirement, the sum insured may be increased. Undoubtedly, this will also increase the premium amount for the policyholder, but will provide sufficient insurance coverage.

Another important aspect that needs to be taken care of is the co-pay feature (in which part of the claim is paid by the policy holder) and a list of exclusions that are mentioned in the given policy. It is preferable to be admitted to a network hospital since the fee structures for all services offered by network hospitals comply with the insurance claims sub-limits mentioned in the insurance policy document.

What to do before buying a policy?

Policyholders should consider the following points before signing the offering document.

  • Understand medical insurance needs in terms of family history of illness, lifestyle, occupational risk and general health profile;
  • Estimate the medical coverage needed to cover all medical needs;
  • Monthly/annual medical budget;
  • Compare different medical policies, sub-limits vs. no sub-limits, deductions and co-pay;
  • Choose the most suitable one to maximize the benefits of the policy.

(Madhukar is Dean and Director and Manrai is Assistant Professor, Amity Business School, Gurugram. Opinions expressed are personal and not necessarily those of Financial Express Online.)


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