Sub-limits on medical health insurance could make your coverage advantages insignificant

Take the case of Hanu Shukla, a Lucknow-based advertising govt, who purchased a well being coverage 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. However, 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 the direction of maternity advantages. The coverage had a sub-limit on the general sum insured for maternity advantages. There are various subscribers like Shukla who’re unaware of the sub-limits and have needed to shell out cash for therapy prices when their insurance coverage claims transcend the sub-limits.

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Sub-limits in well being cowl

“A number of insurers typically impose a compulsory co-payment and sub-limits clause on the well being cowl if you purchase a coverage to scale back the premium. Whereas this may occasionally scale back your premium to some extent, it should price you dearly if you file a declare,” mentioned Venkatesh Naidu, CEO of Bajaj Capital Insurance coverage Broking Ltd.

Sub-limit: That is the time period utilized by insurers for a financial restrict on bills for illness/sickness therapy, room hire, post-hospitalisation, and pre-planned medical procedures. In such a case, the insurer will solely cowl prices as much as a particular restrict; the policyholder should cowl bills above that restrict.


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Do observe that sub-limits can range, relying on the coverage and the insurer. It might be a proportion of the overall quantity insured or as much as a specific amount specified by the insurer. As an example, ICU charges and hospital room hire are typically capped at 2% and 1%, respectively, of the overall sum assured.

Biresh Giri, govt vice chairman and appointed actuary at ACKO insurance coverage, mentioned, “Sometimes, in well being insurance policies, non-medical bills (consumables) are usually not coated however this typically makes up about 15-20% of the medical invoice. Apart from, the capping on room rental price is usually at round 2% of the sum insured. So, subscribers have to test whether or not the insurer covers non-medical bills of their coverage time period. If the policyholder exceeds the insurance coverage protection, they need to bear the distinction from their pocket.”

Larger sub-limits: There are insurance coverage covers with increased sub-limits, relying on the particular therapy pertaining to cataract surgical procedure, knee alternative surgical procedure, maternity, and many others. “The bills for cataract surgical procedure are normally capped at 24,000 and that for maternity and oral chemotherapy at 50,000,“ mentioned Yashendra Sharma, head-employee advantages at Alliance Insurance coverage Brokers.

Nonetheless, hospitals can invoice you as much as 1.5 lakh for cataract surgical procedure or maternity admissions, which implies you may need to bear greater than two-thirds of the price out of your pocket.

Regulatory norms: The Insurance coverage Regulatory and Growth Authority of India (Irdai) has not issued any particular rules for sub-limits in a well being coverage. Additionally, not all medical 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 bounds. Sharma mentioned 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 well being coverage,” added Sharma.

Why sub-limits? “One of many predominant targets of sub-limits is to assist insurers lower their general claims whereas underwriting well being insurance policies. Secondly, it additionally decreases their legal responsibility restrict and the funds to be made to the policyholders,” mentioned Sharma.

Ankit Agrawal, CEO and co-founder of, mentioned, “Sub-limits are mounted by medical health insurance suppliers to scale back the probabilities of false claims filed by the policyholders and to make sure truthful utilization of the protection supplied.”

Whereas insurers consider such parameters to impose sub-limits on the therapy price of a number of surgical procedures, you will need to know that insurance policies with sub-limits purchased for deliberate surgical procedures will not be advantageous at any price.

As an example, some insurance policies might not profit newly married {couples} as a result of they’ve a four-year ready interval to cowl maternity care and permit bills as much as a most of 50,000 per coverage, topic to phrases and situations.

So, if you happen to purchase a coverage with 10 lakh sum insured, you’ll roughly must pay a premium of 50,000 (together with taxes) by the point your coverage’s ready interval will get over. Furthermore, the coverage won’t be relevant in case you get hospitalized for childbirth inside 4 years of the ready interval.

Mint take: You need to select a well being coverage by evaluating completely different insurance policies on-line or take an advisor’s assist to pick out one. You need to keep away from shopping for a well being coverage with particular process sub-limits.

Earlier than buying a medical health insurance coverage, it is best to rigorously research the coverage paperwork and contemplate numerous elements, together with co-payment decisions (the place you will need to pay a predetermined portion of the declare quantity) and the checklist of exclusions. It could assist if you happen to additionally familiarize your self with the options for “limits,” “deductible,” and “co-pay” in your medical health insurance coverage.

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