MAY 22, 2018 BY HEALTHINSURANCEADVISOR
Health insurance is a must and when you buy a health insurance policy, we recommend you understand the features and go carefully over the exclusions and other caveats such as sub-limits and co-payment. A sub-limit clause in a health insurance policy caps the benefits for specified conditions. The co-payment clause only pays for a portion of the claim amount and the rest is to be borne by you.
Sub-limits and co-payments put a burden on your pocket and therefore should be avoided. Capping of room-rent is one such sub-limit that can increase your out-of-pocket expenditure. But before we tell you why you should be wary of it, here is what a health insurance policy pays for.
The expenses mediclaim pays for
A health insurance policy, you may also know it as a mediclaim policy, pays for hospitalization. It pays expenses like room rent, doctors’ fees, nursing expenses, surgical procedures, medicines, and diagnostic tests. Most policies also cover ambulance costs typically up to a limit and specified day-care procedures. The policy will also pay for pre- and post-hospitalization expenses, up to a specified period.
These expenses include doctors’ fees, cost of medicines and diagnostic tests that one usually incurs before and after hospitalization. But keep in mind that there is a list of exclusions—which includes the waiting period for specified ailments and pre-existing ailments. There is also a list of items and medical procedures that the policy will not pay for.
Room rent sub-limit
A sub-limit, as explained earlier, limits the liability of an insurer in case of a claim.
Sub-limit on room rent would mean that the insurer defines the maximum amount it will pay towards the room rent. Mostly, this limit is defined as a percentage of sum insured.
So, a 1% per day cap in a policy with a sum insured of Rs3 lakh means that the insurer will only pay Rs3,000 per day towards room rent. In other words, you would be eligible to stay in a room with a tariff of up to Rs3,000 per day.
If you choose a room with higher tariff, the insurer will not pay and you will foot the difference.
But that’s not all. You don’t only pay the difference in the room rent alone, but most of the other expenses as well. These include: doctors’ fees, nursing fees and surgery costs.
This is so because the cost of medical procedures is linked to the room that you choose. So, for the same line of treatment a person with a twin-sharing room will pay less compared to a person with a single room. Its known as Packages in Hospital commercial terms.
Sub-limits on room rent, therefore, can really hurt your out-of-pocket expenditure. It’s better to avoid policies that cap the room rent. Or if you intend to buy them , then clearly underdtand the functioning of claim assessment.
Typically, you will find policies with low sum assured having sub-limits on room rent. Also policies with sub-limits tend to be more affordable, so If affordability is an issue and you can’t find a plan that doesn’t cap the room rent, then make sure that instead of a cap you go for a policy that defines the eligibility of room type clearly. If you take proper advice from our team, we can suggest you a policy of 2 lac cover without any room rent limit.