Disease wise sub limit in Health Insurance

If you look at our Health Insurance 101, you’ll see we always advocate against having disease-wise capping in a health insurance plan.

Ever wondered why we do that?

Take a look here & you’ll know how a disease-wise sub-limit in a health insurance policy can have an alarming impact on your savings.

What is Disease-Wise Sub limit in Health Insurance?

Disease-wise capping or sub-limit in health insurance is a percentage of the sum insured or a fixed amount set aside for treating a particular ailment. Beyond this upper limit set aside for the treatment, any additional costs billed will have to be paid by the policyholder.

What is the effect of Disease-Wise Capping in Health Insurance on your claims?

Say, you have availed of a health insurance plan for INR 10 lakhs with a disease-wise sub-limit on several ailments, including heart surgery. The maximum coverage for heart surgery would be INR 1 lakh. This had seemed a lucrative policy during the time of purchasing the policy because -

1. The insurer had said that if you avail of this policy with a disease-wise sub-limit, your premium would be pretty affordable.
2. You don’t have a family history of cardiac issues.

However, unfortunately enough, you are diagnosed with cardiac trouble that requires major surgery. Post the surgery and the recovery process in the hospital, the bill comes to INR 4 lakhs, which should be okay considering that your sum insured of INR 10 lakhs would cover the entirety of the bill. Right?

But, here’s something you forgot: the disease-wise capping in your health insurance plan that had a tiny clause attached - coverage of a maximum of INR 1 lakh in the case of any heart surgery. So, you can claim only up to the pre-specified upper limit under the funds available for heart surgery.

Thus, even after paying a premium towards a sum insured of INR 10 lakhs, you end up paying the additional INR 3 lakhs out of your pocket. And in case you sat to compare, you will find that the amount you saved in your premium is just a sliver compared to the amount you were subjected to pay over your hospital bills.

Why do Health Insurance companies implement Disease-Wise sub limits?

While the IRDA (Insurance Regulatory and Development Authority) has never specified a disease-wise sub-limit for health insurance plans, insurers implement these as a measure to financially safeguard themselves -

1. Reduce insurance frauds
2. Avoid the chances of inflated and unwarranted medical bill presentations by clients during the claim settlement process.
3. Mitigate the outgoing claim amount.
4. Lessen the financial liability of the insurers towards their policyholders, thereby safeguarding their business stability and Incurred Claim Ratio that helps them stay afloat as one of the best health insurance providers across India.

How to avoid disease-wise capping in your health insurance policy?

The only way to avoid disease-wise capping in your health insurance policy is to opt for a health insurer and a health insurance plan that does not implement any disease-wise sub-limits!

Have you ever approached a health insurance expert?

They will always tell you when choosing a health insurance policy that caters to your financial and medical requirements, there are a few factors that you have to take into consideration -

1. No copayments
2. No room rent limits, and
3. NO DISEASE-WISE SUB-LIMITS

-along with features like restoration, minimum waiting period, daycare treatment coverage, domiciliary coverage, high No-Claim Bonus, etc.

Take a look at some of the best health insurance policies of 2024 that implement no disease-wise sub-limits -