You feel you have done the right thing by taking medical insurance for a fairly high sum assured. But that may still not be enough for there is an important point to be noted.

Most medical insurance policies have a ‘sub-limit’ under several heads on various aspects of hospitalisation. This can cause a significant outflow from your pocket. So all costs lower than your sum assured may not necessarily be cleared by the insurance company.

The upper ceiling

Sub-limits exist for many key factors of hospitalisation such as room rent, ICU expenses, doctor fees, anaesthetist, ambulance charges, medicines, oxygen, blood, diagnostic tests such as X-ray and so on. Typically, the room rent expenses are capped at 1 per cent of the sum assured for a day, while ICU charges have a ceiling of 2 per cent of the sum assured.

So if you have taken a policy for Rs 1 lakh, then your room charges can be Rs 1,000 a day and ICU charges must not exceed Rs 2,000. Each cost head is calculated by the insurance companies, based on prevalent rates in hospitals and realistic estimates made by them. This also minimises scope of misuse and fraud of inflated bills.

Companies such as United India Insurance, Star Health and National Insurance have defined sub-limits for various categories. So, if charges under a given head exceed the limit for that category, you will have to fork out the excess amount.

On the other hand, some insurers such as HDFC Ergo, Bajaj Allianz and ICICI Lombard have policies that do not specify any sub-limit for the typical cost heads mentioned earlier.

Others such as Max Bupa specify absolute figures (say Rs 2,000-4,000 depending on category of sum assured) that cannot be breached in the case of room rents. Ambulance charges range from Rs 1,000-2,000 across insurance companies.

Apart from these limits there are also sub-limits on pre- and post-hospitalisation care. In some medical cases, these two aspects are critical for maintaining good health.

Almost all insurance companies have a ceiling for this cost head. You must be aware that the cap on charges ranges from 7-10 per cent of the sum assured or an absolute amount specified by the insurance company in advance.

The other set of sub-limits pertains to the maximum amount that can be paid for certain ailments and their treatment.

These include surgeries for cataract, hernia, ENT and kidney stone removal among others.

Companies specify limits as a percentage of sum assured or absolute amounts. For example, in the case of cataract removal, United India Insurance specifies 25 per cent of sum assured or actual costs, whichever is less. In the case of ICICI Lombard for a sum assured of Rs 1 lakh, the ceiling is Rs 10,000.

Overcoming limitations

You can follow some simple rules to overcome the constraints posed by sub-limits. First, you can take a policy for a fairly large amount early in life, so that that the sub-limits become that much larger.

Second, you can opt for policies that do not specify sub-limits. Finally you must always ensure that you are treated in the network hospitals specified by the insurance companies. Be aware of 2-3 hospitals in your neighbourhood in case of emergencies.

These network hospitals generally have cost structures that are largely in line with the sub-limits specified by the insurance company.


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