Take the case of Hanu Shukla, a Lucknow-based advertising government, 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 each year) thereafter. But, after his spouse Neeshu Tripathi was admitted to a hospital for the supply of their first baby, Shukla discovered that he was solely eligible for a reimbursement of ₹50,000 in direction of maternity advantages. The coverage had a sub-limit on the general sum insured for maternity advantages. There are many 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
“Several insurers typically impose a compulsory co-payment and sub-limits clause on the well being cowl whenever you purchase a coverage to scale back the premium. While this may increasingly cut back your premium to some extent, it’s going to price you dearly whenever you file a declare,” said Venkatesh Naidu, CEO of Bajaj Capital Insurance Broking Ltd.
Sub-limit: This is the term used by insurers for a monetary limit on expenses for disease/illness treatment, room rent, post-hospitalisation, and pre-planned medical procedures. In such a case, the insurer will only cover costs up to a specific limit; the policyholder must cover expenses above that limit.
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Do note that sub-limits can vary, depending on the policy and the insurer. It could be a percentage of the total amount insured or up to a certain amount specified by the insurer. For instance, ICU fees and hospital room rent are generally capped at 2% and 1%, respectively, of the total sum assured.
Biresh Giri, executive vice president and appointed actuary at ACKO insurance, said, “Typically, in health policies, non-medical expenses (consumables) are not covered but this often makes up about 15-20% of the medical bill. Besides, the capping on room rental cost is generally at around 2% of the sum insured. So, subscribers need to check whether the insurer covers non-medical expenses in their policy term. If the policyholder exceeds the insurance coverage, they must bear the difference from their pocket.”
Higher sub-limits: There are insurance coverage covers with larger sub-limits, relying on the particular therapy pertaining to cataract surgical procedure, knee substitute surgical procedure, maternity, and so forth. “The bills for cataract surgical procedure are often capped at ₹24,000 and that for maternity and oral chemotherapy at ₹50,000,“ stated Yashendra Sharma, head-employee advantages at Alliance Insurance Brokers.
However, hospitals can invoice you as much as ₹1.5 lakh for cataract surgical procedure or maternity admissions, which suggests you may need to bear greater than two-thirds of the price out of your pocket.
Regulatory norms: The Insurance Regulatory and Development Authority of India (Irdai) has not issued any particular laws for sub-limits in a well being coverage. Also, not all medical insurance insurance policies include a sub-limitclause. A couple of insurers impose sub-limits, whereas some others cost a substantial premium to take away the boundaries. Sharma stated the choices on sub-limits are primarily taken by insurers. “Irdai, nevertheless, 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 the main goals of sub-limits is to help insurers decrease their overall claims while underwriting health policies. Secondly, it also decreases their liability limit and the payments to be made to the policyholders,” stated Sharma.
Ankit Agrawal, CEO and co-founder of InsuranceDekho.com, stated, “Sub-limits are fastened by medical insurance suppliers to scale back the probabilities of false claims filed by the policyholders and to make sure honest utilization of the protection offered.”
While insurers evaluate such parameters to impose sub-limits on the treatment cost of several surgeries, you must know that policies with sub-limits bought for planned surgeries may not be advantageous at any cost.
For instance, some policies may not benefit newly married couples because they have a four-year waiting period to cover maternity care and allow expenses up to a maximum of ₹ 50,000 per policy, subject to terms and conditions.
So, if you buy a policy with ₹10 lakh sum insured, you will roughly have to pay a premium of ₹50,000 (including taxes) by the time your policy’s waiting period gets over. Moreover, the policy will not be applicable in case you get hospitalized for childbirth within four years of the waiting period.
Mint take: You should choose a health policy by comparing different policies online or take an advisor’s help to select one. You must avoid buying a health policy with specific procedure sub-limits.
Before purchasing a health insurance policy, you should carefully study the policy paperwork and consider various factors, including co-payment choices (where you must pay a predetermined portion of the claim amount) and the list of exclusions. It would help if you also familiarize yourself with the alternatives for “limits,” “deductible,” and “co-pay” in your medical insurance coverage.
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