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Capping on Room Rent Under Health Insurance Policy

In the current times, health insurance has come up as one of the most required investments made by an individual as soon as he/she starts working. The reason for the same is, it enables the policyholders to opt for the most suitable form of treatment without thinking much about its cost.

Health issues can occur to anyone and to protect ourselves against them in all possible ways is our priority. From a healthy lifestyle to opting for an appropriate health insurance plan is all that we need. While a health insurance plan is one of the wise decisions that we can make, it is always recommended to read all the terms and conditions carefully to ensure that the claims are not rejected. One of the things that we all should thoroughly check in our health insurance policy is capping on room rent while hospitalized.

What is Room Rent Capping?

Before a hospitalization, we all should check the room rent capping under our health insurance policy. Room rent capping is the limit of hospital room cost that is borne by our insurance provider. This capping can either be a whole figure that states how much room rent expenses are paid by the insurer or as a specific percentage of the sum assured.

Generally, our health insurance policy explicitly mentions the capping on room rent in the policy documents. For example, if the capping on room rent set by the insurer is Rs. 5000, then we can claim only Rs. 5000 as room expenses.

How Does Health Insurance Claim Gets Affected by Capping on Room Rent?

If we raise the claim with our health insurance provider against any treatment that we have taken in the hospital, a large part of it is dependent on the limit of the room rent. However, if we go overboard for the specified amount that is paid as room rent, then all other expenses that are borne by the insurance provider can reduce.

Suppose, you have taken a health insurance policy with a sum assured of Rs. 10 lakhs, and the room rent limit under it is 1% of the total sum assured. This means the capping on room rent is Rs. 10,000. Now all other expenses that incur during your hospitalization include fees of the surgeon, surgery cost, medical tests, and medicines will also get affected by this capping on room rent. The compensation of all these expenses will be borne by your insurance provider only when the room rent for your hospitalization is under Rs. 10,000. However, if it increases, your claim can get reduced in the same ratio at which the limit of room rent is exceeded.

Let us consider a practical scenario:

Scenario 1:

Mr. A took a health insurance plan with a sum assured of Rs. 4lakhs. However, his health insurance policy has a room rent capping which is Ra. 2000. A few months back he underwent a treatment related to his heart issue, wherein he selected an AC room in the hospital that cost Rs. 4,500 per day. Now let us see how his health claim got impacted due to this:

  • Sum Insured: Rs. 4lakhs
  • Capping on Room Rent: Rs. 2000
  • The actual rent of the room: Rs. 2000
  • Days for which he was hospitalized: 5 days

As there is a cap on room rent, the insurance provider will make the reimbursement accordingly. Despite having the sum insured of Rs. 4lakhs, Mr. X will not be able to get the complete reimbursement of the medical bill.

Scenario 2: Without Room Rent Capping

In the same scenario of Mr. X, if there is no capping on the room rent, then the whole expenses of his hospitalization that are covered in his health insurance plan will be reimbursed by the health insurance provider. However, this should be under the limit of sum insured for which is Rs. 4lakhs.

Importance of Capping on Room Rent While Selecting a Health Insurance Plan

Now that you understand the significance of capping on room rent, it is important to consider this factor at the time of selecting a health insurance plan for yourself and your family. Ideally, you must go through the terms and conditions of various health insurance policies to understand it. Doing so you will be able to identify health insurance plans that are much lenient with capping on room rents. After this, you will be able to make an informed decision.

Tips to Consider for Capping on Room Rent While Selecting a Health Insurance Plan

You must select your health insurance policy very carefully as it is for providing financial help when you or your family member is ill. Despite what you are looking for in a health insurance plan, it is recommended to understand various terms and conditions that are associated with your policy. This is to ensure that you do not end up losing more amount when some medical emergency comes up.

Summing it Up!

Different health insurance plans have different advantages and disadvantages. So, it is best to compare different plans online and select the one that best suits your requirements. Considering capping on room rent is as well essential as it can cut down the cost of other medical expenses if the capping exceeds its limit. Therefore, keep the room rent capping in mind while selecting a health insurance plan as it plays an essential role while you are claiming your hospitalization expenses.

Written By: PolicyBazaar - Updated: 04 December 2020
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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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