With the cost of health care going up, a good health insurance policy can be a lifesaver. But before you buy health insurance, it is important to understand all its terms and conditions. One such term is “room rent limit.”
This article will explain how the room rent limit works and how you can avoid unexpected costs during a time of need.
What is room rent limit?
Room rent limit is the maximum amount the insurance company will pay the policyholder for a hospital room. This limit can be a percentage of the Sum Insured or a specific amount, such as 2% of the insured amount. So, if you have a policy that covers Rs. 3 lakhs in health costs, the room rent limit will be Rs. 6,000 per day. Hospitals usually charge differentially depending on the room you choose. So if your room rent changes, so does the cost of your treatment. For example, if the doctor’s consultation fee is Rs. 1,500 and the room costs Rs. 6,000, it would be Rs. 1000 for a room that costs Rs. 3,500 to rent. In the same way, the other costs, like medicine, tests, and surgery, will be higher for the room with the higher room rent.
The impact of room rent on claims
Room rent limits can significantly reduce your coverage, so choosing a room within your policy’s limits is important. Remember that other hospital charges will also be affected by the room you choose, so it’s important to consider all the potential costs before selecting the room. So, if you are eligible for a room that costs Rs. 4,000 but choose one that costs Rs. 8,000 instead, the insurer will pay part of your claim. The insurer doesn’t compare how much each charge is in two different rooms, but it will lower the total bill based on how much each charge is. So, if you are eligible for a room that costs Rs. 2,000 but choose one that costs Rs. 4,000, Rs. 6,000 or Rs. 8,000 instead, your claim will be reduced to 50%, 33%, or 25% of the total bill, depending on how much more expensive the room you chose was.
There are a few reasons why insurers limit the room rent. First and foremost, it helps to keep premiums low. If there was no limit on the room rent, then insurers would have to shell out a lot more money towards claims, resulting in high premiums. Secondly, it encourages policyholders to opt for lower-priced rooms, so they don’t have to bear additional costs. Finally, it helps control hospitalisation costs, which can spiral out of control.
What should you do then?
The idea of a room rent limit in health insurance is helpful as long as you choose a room whose rent is less than the limit. If you don’t, it can make a big difference in how much you get from your claim. So, the best thing to do is purchase a health insurance policy with no room rent limit. If you choose this kind of policy, you’ll be able to get treatment in the room of your choice without having to worry about the cap. Most policies with a sum insured of 5 lakh or more do not have a limit on room rent. If you get a policy for yourself, you should choose a 10 lakh cover if possible. For a family floater policy, get a cover of 15 lakh. In any case, read the policy carefully before buying it to ensure that the room rent is not limited.
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