Truth About Room Rent Limit in Your Health Insurance Policy

It is true that the health coverage amount of a health insurance policy is an important parameter when choosing a plan. But always remember that it is not the only parameter. There are many different factors in health insurance that can either benefit the policy holder or act as obstacles. Therefore, it is important for the general public to be aware of all the features and limitations of a health policy, like sub-limits, co-pay amount, annual medical checkup, network hospitals, and finally, the room rent limit.Let us take a closer look at the last factor, the room rent limit and how it would affect your insurance claim.

The room rent limit is an amount upto which the insurer agrees to cover the hospital room rent per day. For eg. if the room rent limit is Rs. 2500 per day, and if the hospital is charging Rs. 2000 per day for a twin sharing room, then your insurer will cover the rent costs of the room. However, if the rent is Rs. 3500, you will have to pay the balance amount of Rs. 1500 from your own pocket.Some may find this acceptable and agree to pay the additional amount of rent for a better room. However, one must keep in mind that these are per day charges. And if you have to pay an additional Rs. 1500 per day for say a week of hospitalization, then the total comes up to Rs. 10,500, which is a significant amount.

Many people are not aware that all the charges in a hospital, whether they are the actual surgery charges, doctor’s visit charges, lab tests etc are directly related to the type of room that patient is admitted in. If you have opted for a deluxe private room, alongwith the room rent, other charges will also be higher than that of a regular or twin sharing room.The hospital essentially charges a patient according to their paying capacity. If you’re being charged Rs. 20,000 for a surgery with a twin sharing room, the exact same procedure could cost you Rs. 30,000-40,000 if you opt for a private room.

If your health policy does not have any sub limits and you choose to stay in a deluxe room with higher treatment costs and rent, then your insurance provider will cover the entire cost.However, if the policy has rent sub limits, the reimbursed amount will be calculated in proportion of the room rent limit to actual rent.For eg. if you file a claim for Rs.1.5 lakh through your policy that covers upto Rs. 5 lakh, wherein the room rent limit is Rs. 3500 per day and you opted for a room with a rent of Rs. 5000, the reimbursed amount will be calculated as: 1.5 lakh * 3500/5000 = Rs. 1.05 lakh And NOT as: 1.5 lakh - (1500 * 6 days) = Rs. 1.41 lakh

Thus, it is clear that the room rent limit has a significant impact not only on the rent expenses reimbursed, but also on the total claimed amount. This makes it an important factor to consider when choosing a health plan. Choose a health insurance policy that has a higher room rent limit, so that you can make your hospital stay more comfortable, get better facilities and ensure that you do not have to pay anything extra from your own pocket.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.