Health Insurance Policy: Sub-limits


While selecting a health insurance policy one must look at room rate cap. There are many types of sub-limits but the room rate cap is the one that bites the hardest at the time of a claim.
This is especially true for the mediclaim policies or some of the older plans that people have. These come with sub-limits like room rate is capped at Rs.3,000 or in many cases, the cap on room rent is 1% of the sum insured which is mainly the case in most of the PSU insurance plans.

Let us understand this by an example. Say, your total claim amount is Rs 1 lakh. The insurance company would remove the medicine expenses from the claim, say Rs.10,000, and pay the proportionate amount on the rest. So, if your room rent eligibility is one-third of the amount incurred, then you will get only Rs.30,000 and the rest of the room rent, if incurred, will have to paid by you.

In order to avoid such sub-limits, you need to switch your old health insurance plan to a new generation health insurance plan that does not have any room rate sub-limits and has overall minimum sub-limits. You may end up paying Rs.200-500 more per month but you will not be forced to compromise on your treatment if the situation ever arises.

In most cases, even one claim in a lifetime will recover a major part of your premium paid over decades. Most people feel they would lose their benefits if they move to a new generation plan. However, that is not correct. The insurance regulator has allowed porting where you can move from an old plan to a new plan without losing your tenure benefits.


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