Health insurers are increasingly selling policies that promise “unlimited” cover. It is generally means there is no upper limit on the policy sum insured, offering a cushion against rising medical costs.
It sounds like a safety net with no ceiling but a close reading of policy documents reveals a different picture. The word “unlimited” often comes with conditions, limits and cost-sharing rules. Your coverage may not run out but your out-of-pocket costs might still continue.
” ‘Unlimited’ simply means that there is no upper limit set on the maximum amount of claim that one can make altogether. However, this doesn’t imply that all costs will be reimbursed without any limitations. There are still caps on items such as room charges and treatments, among other restrictions,” Naval Goel, founder and CEO of PolicyX.com said.
How ‘unlimited’ is it?
Mostly, the policies follow a basic structure. They promise to pay hospital expenses only up to defined limits, under defined conditions, and for admissible costs.
For instance, the Care Supreme health policy says the insurer will pay only “expenses that are reasonably and necessarily incurred up to the limits specified”.
In its standard policy form, the clause specifies that the insurer will cover charges that are typical for a particular treatment in that region and hospital type. This helps prevent hospitals from overbilling and stops collusion between patients and insurers. However, the problem is that it is the insurer, which decides what is reasonable and customary, is also the one paying the claim.
The Super Star policy, too, promises to pay expenses “not exceeding the sum insured/ annual sum insured/ appropriate benefit stated in the policy schedule”. Besides, ICICI Lombard’s Elevate policy uses similar language and caps payouts under “annual sum insured/ appropriate benefit amount”.
This means the base structure is still tied to limits, conditions and definitions.
The catch: What ‘unlimited’ really means
In most health insurance policies, “unlimited” does not mean infinite money from day one. Unlimited restoration means your insurance cover gets refilled after you use your initial sum insured and this can happen more than once a year. This helps if you have multiple hospitalisations.
“For instance, if you have a Rs 10 lakh cover and use it fully once, the insurer restores another Rs 10 lakh for the next claim. But this may only work for certain illnesses, depending on the policy. Also, limits on certain treatments still apply every time. So even though your cover keeps getting renewed, each claim is still subject to the same rules and caps,” Goel said.
This means that a refill always comes with a rule. It may apply only to new illnesses. It may not apply to the same disease repeatedly or, it may depend on policy terms or add-ons.
