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Health Insurance 367 views March 9, 2021
A health insurance plan helps people prevent their hard-earned money from getting exhausted towards costly hospital bills should they face a medical emergency. But there are some important factors that people tend to ignore due to lack of knowledge before choosing a suitable health insurance plan for themselves. One of those factors is the room rent limit in health insurance. A health insurance plan provides coverage against the expenses incurred on the medical treatment. However, a plan may not provide full coverage against every expense incurred during the treatment.
When we talk about the room rent limit in health insurance, it is the limit decided by the insurer on the coverage of room rent and other boarding expenses during your hospitalization. It can be either a percentage of your overall sum insured or up to a fixed amount per day room charges per policy year. Let’s understand this with an example. Suppose you have a health insurance plan with a sum insured of INR 2 lakh. If the room rent limit is 1% of the sum insured, you can receive coverage up to INR 2,000 per day towards the room rent. You will need to bear any expense over this limit from your pocket.
Now that you know the basics of the room rent limit in health insurance, we will be discussing its impact on your health insurance along with types of room rent limits under a plan. Keep reading to know more!
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Impact of Room Rent Limit In Health Insurance
Until now, you must have understood that room rent is a charge for your room or bed per day during treatment. A health insurance plan covers expenses incurred on room rent with a certain limit called a room rent limit. Some health insurance companies provide a few unique plans where there is no room rent limit. It means that if you choose to stay in a private deluxe room with a higher rent, your plan will provide coverage for the entire cost. Some plans require you to pay an additional premium to get no limit on your room rent.
However, if your plan has sub-limits, you will need to pay any room rent expenses above the limit pre-decided by your insurer. This limit, usually, changes from one policy to another. To understand the impact of room rent limits on health insurance, we are giving you an example below. Please check!
Let’s say an individual with basic health insurance offering a sum insured of INR 5 lakh needs to get hospitalized for her treatment. We are taking two scenarios where the plan has a sub-limit of up to 1% of the sum insured, and where there is no capping on the same. Check the below table to know more!
| Details | Health Insurance Plan with No Room Rent Limit | Health Insurance Plan with a Room Rent Limit |
|---|---|---|
| Sum Insured | INR 5 lakh | INR 5 lakh |
| Room Rent Limit | No Limit | Up to 1% of the sum insured, subject to a maximum of INR 2,000 per day |
| Number of Days of Hospitalization | 3 | 3 |
| Room Rent per day | INR 4,000 | INR 4,000 |
| Total Room Rent (4,000*3) | INR 12,000 | INR 12,000 |
| Room Rent Coverage provided by the insurer | INR 12,000 | INR 6,000 |
| The amount you will need to pay | 0 | INR 6,000 (12,000 - 6000) |
So, you can see that when you are choosing health insurance with a room rent limit of INR 2,000 per day, you will need to pay an additional amount on choosing a room with higher rent. On the other hand, you don’t need to pay any money on choosing a plan with no limit on room rent.
Types of Room Rent Limits in Health Insurance that You Should Know
Room rent limit in health insurance comes with different types that you should know when choosing a suitable health insurance plan for yourself and your family. There are mainly four types – Room rent without sub-limits, Room rent with Co-payments, Room rent with specific room types, and Room rent without sub-limits as an additional cover. We are talking about each of them below. Please check!
Room Rent without Sub Limits
This is one of the types of room rent limits in health insurance. As you have seen in the example given earlier, how an individual doesn’t need to pay any extra amount if he or she chooses a plan with no sub-limits on room rent. In this type, the health insurance company will not decide any room rent limit. So during hospitalization, an individual can choose any room type according to his or her convenience.
Room Rent Limit with Specified Room Types
In this type of room rent limit in health insurance, individuals can choose from specified room types that may change from one health insurance policy to another. For example, if a health insurance policy provides coverage for a private room rent during hospitalization, individuals can only be admitted to it if he or she wants a cover or the same. So, check the policy closely before making a final decision.
Room Rent Co-payment
Some health insurance plans also provide room rent coverage on a co-payment basis. With this room rent type, if your room rent expenses exceed the pre-decided limit by the insurer, the room rent will be paid by you or the insurance company. This type helps insurance companies to share the expenses on the room rent with the policyholder. This is also one of the good options that people choose in their health insurance policies.
Room Rent with No Sub-limits as Additional Cover
With some health insurance policies, you can choose the option of room rent with no limit as an additional cover. To opt for this cover, you will need to pay an additional premium amount towards your policy. With this additional amount, you can enjoy no limit on room rent during your hospitalization.
When going for health insurance to secure your finances from a medical emergency, don’t forget to check the room rent limit mentioned on your policy document. This will help you choose the right insurance plan.