Room Rent Limits & Proportionate Deduction In Health Insurance

There are several essential points listed in the terms and conditions section of your health insurance policy document. One such condition is the room rent limit. You may have taken sufficient health insurance cover, but if it comes with room rent limits, you may never really be able to use the entire coverage. Wondering why?

We’ll find out - in this article. First, let’s understand the meaning of room rent and room rent limits in health insurance.

Let’s dive right in!

What Is Room Rent?

Room rent is the per-day bed or room charges that you are required to pay when you get admitted to a hospital.

The rent majorly depends on the type of room you choose. For instance, the rent for a luxury or private AC room will be more than the rent for a private non-AC room.

What Is A Room Rent Limit?

A room rent limit is the limit up to which your health insurance will cover the per-day hospital room charges.

Types Of Room Rent Limits

Room rent limits are of two types -

  • Category Limits

    Here, the insurer will specify the hospital room categories that are covered under the policy. You can opt for a room that costs lower than the category specified - but not higher.

    For instance, the insurer mentions the room category limit as ‘private room’. So, in this case, if you opt for a deluxe or a luxury room, you'll have to bear a major portion of the hospital bill out of your pocket.

  • Financial Limits

    Here, the insurance company will determine a fixed limit - which is usually a percentage of the policy sum insured. And, while you can choose any room category as per your preference, the rent of the room must be within the financial limit specified by the insurer.

    For instance, you have a health insurance policy with a sum insured of Rs. 3 Lakhs. If the room rent limit is 1% of the sum insured, you can get coverage for the room rent up to Rs. 3000 per day.

exclusion of health insurance plans
Not Covered In Health Insurance
  1. Pre-existing disease for a Fixed Term
  2. Cosmetic Surgeries
  3. Injuries caused due to suicide attempts

Calculate Your Health Insurance Premium

How Do Room Rent Limits Impact Your Health Insurance Claim?

If you pick a room with a rent that is more than what you’re eligible for, insurers won’t only deduct the difference in room charge but will also proportionately deduct all associated expenses.

For instance, say Nia is eligible for a room with rent of Rs. 2000. But, she opts for a room that has a rent of Rs. 4000. Here, she’ll have to pay the additional room charges, i.e., Rs. 2000 (4000 - 2000) as well as 50% of all associated medical expenses out of her pocket.

Which Expenses Are Proportionately Deductible?

All hospital expenses will be subject to proportionate deduction except -

Cost Of Diagnostic Tests

Cost of Pharmacy

Cost of Implants & Medical Devices

How Does Proportionate Deduction Work?

Let’s understand with the help of Ankit’s example.

Ankit is covered under a health insurance plan of Rs. 5,00,000. A room rent limit of 1% is applicable under his policy. This means he’s eligible for a per-day room rent of Rs. 5000.

A few months later, he undergoes hospitalisation for a day. He opts for a room with a rent of, say, Rs. 10,000. His total hospital bill amounts to Rs. 50,000. Out of this, the cost of diagnostic tests is Rs. 5000.

Let’s see how the insurer will pay the claim.

Difference in Ankit’s Room Rent = Rs. 5000 (10,000 - 5000)

Proportionate deduction = (Room rent eligible / Room rent availed) * 100

Proportionate deduction = (5000 / 10,000) * 100
= 0.5 * 100
= 50%

So, the insurance company will proportionately deduct all associated expenses by 50%.

Associated expenses = Rs. 40,000

(Hospital Bill Rs. 50,000 - Room Rent INR 5000 - Cost of Diagnostic Test Rs. 5000)

Associated expenses will be proportionately deducted by 50%

So, 50% of Rs. 40,000 = 20,000.

(Hospital bill Rs. 50,000 - Additional room rent charges Rs. 5000 - Proportionate deduction Rs. 20,000)

So, the insurance company will only pay a claim of Rs. 25,000. Ankit will have to pay the remaining Rs. 25,000 out of his pocket. Had Ankit chosen a room with a rent within the limit of Rs. 5000, the insurer would not have deducted the associated expenses proportionately. And, they would have paid the entire claim of Rs. 50,000.

So, you can see how room rent limits can severely impact how you claim under your health insurance policy. This is why, as far as possible, you must always buy a policy without room rent limits.

So, you can see how room rent limits can severely impact how you claim under your health insurance policy. This is why, as far as possible, you must always buy a policy without room rent limits.

What Can You Do If You Have A Health Insurance Policy With Room Rent Limits?

If you’re currently covered under a policy that has a room rent limit, you can port it to a policy without such a limit. You can also -

  • Buy A Super Topup With A Low Deductible And No Room Rent Related Cap

    A Super Top Up gets activated when your hospitalisation expenses surpass the deductible. So, if you buy a Super Topup with the lowest available deductible, it will get triggered quickly in the event of a claim. This way, the impact of proportionate deductions can be kept to a minimum.

  • Opt For The Hospital Cash Feature

    This feature will provide a daily cash benefit for each day you’re hospitalised. The daily cash benefit paid under this feature can be a great way to make up for some part of the deductions.

  • Purchase A Critical Illness Plan

    In case you’re diagnosed with a serious illness mentioned in the policy document, this plan will pay a fixed amount of money. Now, say, you’re hospitalised for the treatment of the same illness. In this case, the critical illness insurance payout you receive can be used to offset the proportionate deductions.

This brings us to the end of the article. Hope this article helped you gain enough clarity on how room rent limits can impact your health insurance claim.

Need Quick Support, Talk To Health Insurance Expert

Partners - We Are Proud To Have

We have over 30+ insurance partners on our back. Rest assured, you won't be short of choices.

Why Customers Love Us

Why Customers Love Us?

  1. We provide quick claim assistance.
  2. We are easily approachable through phone, email, and text.
  3. We are transparent operations with no hidden cost.
  4. We pursue your claims till the very end.
  5. We understand your needs, and advise most suitable insurance products to you.

Our Customers' Stories

Sharing the experience of happy and satisfied customers with you.

Sameer Yadav

I was searching for investment plan but I couldn't find it, then I got the call from SMC insurance and they aligned a call with Ishita Sharma as point of contact (POC) for all my queries and she explain me very well. Ishita explain me all investment plan with advantage and disadvantage, I really appreciate her. Ishita always enthusiast towords work and ready to answer all my questions .I have taken two policies ( HDFC click to invest) plan with 15k premium per month. I always recommend SMC insurance to all, for better life and happy retirement with huge health and wealth. Thank You SMC insurance for your best service. Special thanks to Ishita for E2E help and endless support, you did fabulous work. Show More

Dheeraj Bhatia

I am associated with SMC insurance since 2011 and found them to be most ethical, trustworthy and highly responsive. Some of my precious policies done thru other agencies are still running on SMC’s advice. That is a strong testimony to their customer-centric approach. I am glad to be associated with SMC and strongly recommend their services to all concerned. Wishing the very best to Team SMC !Show More

Jyoti Sharma

We were fortunate enough to have selected SMC as our Health Insurance Broker for they have been very helpful in resolving our queries related to health insurance. I would like to cite two examples where SMC's role has been very crucial. One was when payment for cashless hospitalization was not coming through as the insurance company was taking undue longer time to approve the Hospital Bill. It was then I talked to Neha and it was she who through her contacts in the Insurance co. facilitated and expedited the approval for payment of hospital bill. Second was very recently when the Insurance co. had proposed a top up "Enhancer" policy for our existing policy. When I talked to Neha she immediately told me not to take this policy being offered without any medical test as it will not be beneficial to us and may create problem later on account of recent hospitalization. If I had I not consulted Neha, I would have into a big trouble with the insurance co. These two instances speak very high of sincere advice and timely help rendered by the SMC Staff, Ms. Neha Khanna which helped us a lot in time of need.Show More

Sumit Khanna

Hi, I am Sumit here, purchasing insurance policies from SMC for almost 8 years. Would like to recommend this company to other customers because they are taking care of my insurance broking services in a fabulous way. I would like to extend my gratitude and thanks to policy servicing and also insurance claim backend services. They have rendered fantabulous services for me and would like you guys to definitely go and rely on them for all your insurance needs.Show More

Kishor Kumar Bijlani

My experience with SMC Brokers is excellent. They provide support from the beginning till end i.e from issuance of insurance policies till settlement of claims. They explain very nicely various provisions relating to Insurance Policy also facilitate settlement of claims with Insurance Companies. Show More

Megha Singhal

I have purchased HDFC policy from SMC Insurance with the help of Harsh Sharma. I have got the satisfactory services from SMC Insurance. Thank you SMC Insurance.Show More