When Mrs. Radhika sheth was diagnosed with Kidney stone ailment, she was advised laser treatment by her doctor and she promptly took an appointment with the referred hospital for undergoing the procedure. Just 2 days prior to the admission, Radhika gave details of her health insurance policy to the TPA desk for availing cashless treatment at the hospital. A day later she was told that the treatment would cost around Rs. 25000 and the hospital had received the approval from the TPA for that amount. The laser treatment was able to break the stone but the same could not be removed due to complications and a stent was placed subsequently. A few weeks later Radha was again suggested to get admitted to the hospital for removal of the stone and the stent. This time the estimated cost of the surgery was given at around 75000. This time the TPA desk told her that since her health insurance cover was for a sum assured of Rs. 2 lakhs, as per the policy conditions, only 25% of the sum assured or Rs. 50000 can be approved for this type of treatment. Since she had already claimed Rs. 25000 earlier, the TPA gave approval for only Rs. 25000. Apart from the pain of suffering from the ailment, Radha had to suffer the pain of paying up Rs. 50000 from her own pocket inspite of having an insurance cover of Rs. 2 lakhs.

Radha suffered because of the sub-limit clause in the policy which stated that for specific common illnesses there will be a limit in terms of treatment costs. There are hundreds of such cases where people have bought health insurance policies without understanding or reading the policy conditions or sub limits. Sub-limits clause is employed by some insurance companies to reduce their claims outgo and is restricted to some common ailments such as Cataract, Piles, Tonsils, sinus, Hernia, kidney stones, etc. The list of ailments under sub-limits and restriction in treatment costs varies from company to company.

Before buying a health insurance policy one needs to understand these sub limits clause to avoid paying from your own sources and thereby defeating the very purpose of buying health insurance. The explanation of some of these sub-limits is given below.

1. Sub –limits on room rent: Many health insurance companies specifically mention that per day room rent should not exceed 1 or 1.5% of the sum assured. For example, if the policy sum assured is Rs. 2 lakhs then the room rent cannot exceed Rs. 2000 per day if the applicable sub limit is 1%. Several hospitals have standard surgery/treatment packages which are defined in terms of the room that is selected. For example the surgery package for a hernia operation may cost Rs. 15000 in a standard room but the same can cost Rs. 25000 in an AC single room. So for a Rs. 2 lakh policy with 1% sub limit for room rent, any room with maximum Rs. 2000 per day rent can be selected and accordingly the package offered for that room will be approved by the insurance company.

1. Sub limits on specific treatment:  One needs to check the list of ailments which come under the sub limits clause and the amounts specified against each of them. Even though your sum assured may be high, but the sub limit clause will ensure that you won’t be able to claim your entire hospitalization expenses. For example, if there is a sub limit clause of 50% of sum assured for cardiac ailments or cancer, then even if your sum assured is Rs. 5 lakhs, you cannot claim more than Rs. 2.5 lakhs due to the 50% sublimit clause.
2. Post hospitalization clause : Some of the policies specifically mention that after discharge from hospital, any additional costs related to that ailment will be paid subject to a ceiling. This ceiling can be in terms of 5% of sum assured or Rs. 5000 in some cases.

If you don’t want any nasty surprises at the time of claim, it makes sense to go through the above mentioned sub limit clause and select only those policies which does not contain those clauses. Ideally the premium for policies without sub limits may be slightly higher than those which contain those limits, but the benefits far outweigh the costs. Also do not forget to review your insurance cover and increase it if required to take care of increasing healthcare costs.