Defining Room Rent & ICU limits In Group Health Insurance

When buying a group health insurance policy, apart from the sum insured, there are other aspects too that an employer must consider. One of the important aspects to consider before making a purchase decision is to check the room rent & ICU limits in group health insurance. Both of these can increase your employee’s out-of-pocket expenses despite them being a part of your organization’s group health insurance policy.

Read more

Personalised health plans that fit your organization's requirements & dedicated experts to help you choose.

No medical test required
Covers treatment towards illness and accident
Covid-19 cover

App & Website

24X7 Support

Customised Plans

15+ Insurers

Account Manager

Speedy Claims

*Premium starting from ₹110/Employee/Month for ₹1 Lac Sum Insured covering Health & Wellness Needs (excluding GST)
#Premium may vary on the basis of coverage type & add-ons
**All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

₹1 lakh cover @ just ₹110/employee*

Select No. of Employees in your organisation

By clicking on "" you agree to our
Privacy Policy and Terms of Use, and also provide us a formal mandate to represent you to the insurer and communicate to you the grant of a cover.
Get Updates on WhatsApp

Organization we are trusted by


Understanding Room Rent & ICU Limit in Group Health Insurance

As the term suggests, the limit on room rent and ICU is the capping or limit imposed on the coverage of the room occupied by the insured. When an employee gets admitted to the hospital, there are various categories of rooms for him to choose from at different rates. When the employer offers a group health insurance plan, it usually mentions the limit on room rent and ICU an employee can select in the hospital. The room rent & ICU limit in group health insurance is typically calculated as a percentage of the sum insured and are applicable on a per-day basis. The room rent & ICU limits are considered a sub-limit in insurance, that is, an extra limit imposed on a policy.

Let us consider the below example:

Akshay works for a company that offers group health insurance with a sub-limit on room rent and ICU limit. When Akshay got admitted to a hospital for four days, he decided to engage a room that costs Rs 5,000 per day. His group insurance provides him sum insured of Rs 3 lakhs. The room rent limit on this policy is applicable at 1%. Hence, the room rent limit is thus calculated as Rs 3,000 per day (3,00,000 x 1%) and Rs 12,000 for four days. Due to the room rent limit clause, the insurer is liable to pay up to the limit of Rs 12,000. The additional expenses on room rent (the difference of Rs 8,000) must be borne by Akshay.

Choosing the Right Room Rent & ICU Limits for a Group Health Insurance Policy

Selecting an adequate room rent and ICU limit under a group insurance plan is vital as it determines the deduction for other costs incurred during hospitalization. An inadequate room rent limit is one of the major reasons for claims getting settled at a lower amount. There are primarily two factors that need to be considered while choosing the right limits.

Room rents of the network of hospitals chosen

The employer must know the average room rent in the network of hospitals chosen. The type of hospital, whether Tier 1 or Tier 2 will attract different room rents. Similarly, the locality or the area of the hospital also matters to identify the room rent. The employer should then select the appropriate limit.

Sum insured of the insurance policy

As mentioned in the example above, the sum insured plays a significant role in calculating room rent limits. For instance, Rs 3,00,000 sum insured with a 1% limit will have a daily room rent limit of Rs 3,000 and a Rs 5,00,000 sum insured at the same rate will attract a room rent limit of Rs 5,000.

Hence, the employer must consider these two factors before selecting a room rent limit. Additionally, there is an option of choosing a no-capping room rent in group health insurance.


Buying a group insurance plan with comprehensive coverage is the key so your employees are never underinsured. Hence, as an employer, you should always choose a plan with either no limit on room rent or a higher room rent limit. Also, in any of the cases, the insured (employee) should be made well aware of the limitations in advance to avoid any disappointments.


Written By: PolicyBazaar - Updated: 07 November 2022
Couldn't find the right plan?
Let's navigate the complex world of insurance together. It's actually quite simple!

Customizable plans from top insurers

starting @ ₹110/employee*

View Quotes

Group Health insurance articles

Recent Articles
Popular Articles
Ways to Measure the Impact of an Employee Wellness Program

01 Dec 2022

Amid soaring medical inflation and healthcare expenses...
Read more
Section 37(1) of the Income Tax Act Employer-Employee Insurance

29 Nov 2022

Employee welfare is one of the prime responsibilities of an...
Read more
Challenges in Providing Group Health Plan for Employees

29 Nov 2022

With the rapidly changing work environment and needs of the...
Read more
Group Health Insurance for Manufacturing Industry

23 Nov 2022

Group health insurance for manufacturing industry covers medical...
Read more
Annual Medical Check-up in Group Health Insurance

21 Oct 2022

A balanced and nutritious diet, regular exercise, and a routine...
Read more
What Is GIPSA & How Does It Work?
GIPSA stands for General Insurance Public Sector Association.It is a group of four General insurance companies....
Read more
Aspects Related To Termination Of An Employee In India
Every sector in India went through a bad phase after the impact of the Corona Pandemic. Be it the employers or the...
Read more
What is Corporate Buffer in Group Health Insurance?
Group health insurance for employees is one of the most common and favored types of benefits offered by the...
Read more
Bank-Offered Group Health Insurance Policy: Explained!
Adequate health insurance forms an important component in a sound and practical personal financial plan. Its...
Read more
Is Group Health Insurance Compulsory In India?
Group health insurance policy provides coverage to the insured employee in case of a medical emergency. It takes...
Read more