Did You Choose A Premium Room? Your Insurance Claim Amount Might Shrink

Your hospital bill came to Rs 3.5 lakh, and you had a sum assured of Rs five lakh. Yet, you receive a claim of only Rs 3 lakh. One reason for that could be the room rent limit in your policy. Room rent limit in health insurance refers to the maximum amount an insurer will pay for hospital room charges on a per-day basis. Room rent limit charges, along with the pro-proportionate deduction clause, lead to a marked impact on the overall payout from the insurer. And it can lead to substantial out-of-pocket expenses even though you have an adequate sum assured. 

Why Your Claim Is Affected Due To A Room Rent Limit 

“When a more expensive room is selected, the insurer would impose proportional deductions-they will reduce the coverage on all of the claim expenses, hospital fees, surgeon's fees, nursing charges, and ICU charges included. So, although your bill may not exceed the sum insured, you may have to pay the larger amount out-of-the-pocket,” says Surinder Bhagat, head, employee benefits, large account Practices, Prudent Insurance Brokers.

So the main issue is to understand one thing. “The customer is always under the impression that he will have to bear the difference in room rent cost if he opts for a higher category of room. But in fact, all the expenses related to the room category are also increased, like doctor visits, other tests, and nursing charges, so the insured has to bear the additional cost of room and other increased expenses too,” says Surender Tonk, vice president, IBAI (Insurance Brokers Association of India).

Mr. A, an employee, gets hospitalized for surgery for four days. His eligible room rent, as per the policy, is a single standard AC room, which costs Rs 10,000 per day in this hospital, but  Mr. A had opted for a deluxe/premium room that costs Rs 14,000 per day, which is 40 per cent higher than the insurer limit. Hence, all differential charges are deducted proportionately by 40 per cent by the insurance companies, except medicines/drugs and implants.

What You Should Do When Buying Health Insurance 

“Ask your consultant about how room rent caps might affect claims, especially when large sum insured plans are anywhere between sub-limit, which can severely cut down actual coverage by almost 45 per cent,” says Bhagat.

“Policyholders must always check the room rent limit of their policy, opt for a room which is within this limit, and go for a policy with no room rent cap if you prefer deluxe or private rooms,” says Sarita Joshi, head, health and life insurance, Probus. In addition, clarify the room options with the hospital before admission.