Unlimited health insurance: Check claim limits before buying a policy

ManipalCigna’s recent launch of Infinix adds to the list of plans offering an unlimited sum insured. Buyers need to look beyond the coverage amount and check what expenses qualify for payout.

With these plans, customers no longer run the risk of running out of coverage. “Plans offering an unlimited sum insured allow any number of claims without exhausting the cover,” says Rohan Goel, business head of health insurance, Policybazaar. Some plans, however, allow only one or two claims of unlimited amounts.

A serious illness can test whether the cover chosen years earlier is adequate. A plan with an unlimited cover reduces that concern. “They provide a financial cushion during serious illnesses, organ transplants, major surgeries and prolonged intensive care stays,” says Vineet Gupta, head – product development, ManipalCigna Health Insurance.

Sometimes, bills arrive in stages, through repeated hospitalisations for one person or claims by several family members. With unlimited cover, patients need not worry about running short of coverage. Compromises can be avoided. “Treatment options are not influenced by how much of the sum insured remains,” says Nimish Agrawal, director digital business unit and chief marketing officer, Niva Bupa Health Insurance.

Medical inflation, estimated at about 14 per cent in India, can render a fixed sum insured inadequate over time. “An unlimited base cover removes the need to periodically select a higher monetary limit,” says Agrawal. 

A buyer may wonder whether a fixed sum insured policy with the restore feature can offer similar protection. “An individual claim remains capped at the base sum insured, even when restorations are unlimited,” says Gupta.

Consider a policyholder with a ₹10 lakh base cover who faces a ₹15 lakh claim. Despite the restore feature, the policy pays only ₹10 lakh, leaving the policyholder to shell out the remaining ₹5 lakh. An unlimited cover plan pays the entire ₹15 lakh.

Some policies allow the restored amount to be used only for an unrelated illness or for another insured family member.

An unlimited cover does not pay for every expense associated with an illness. “Customers should not mistake an unlimited cover for unconditional coverage,” says Arun Ramamurthy, co-founder, Staywell.Health. Exclusions, waiting periods, room rent restrictions, and non-payable expenses (say, for consumables) may still apply.

Co-payments and deductibles (especially for larger payouts) can increase customers’ out-of-pocket expenses.

An unlimited cover carries a high cost. “They have a similar premium or are slightly costlier than a plan with a base sum insured of ₹1 crore,” says Goel.

For Surya, the question is also what the policy will cost as he ages. Premiums are substantially higher for older buyers. “Currently, an unlimited plan for a 35-year-old individual living in Delhi is around ₹12,000 to ₹15,000. For a 65-year-old, the cost goes up to ₹55,000 to ₹60,000,” says Goel.

Today’s prices, however, are no indicators of how prices will escalate in the future. These plans have limited claims experience. Future claims could exceed insurers’ estimates. There is always the chance they may undertake revisions based on claims experience, medical inflation and age that are steeper than expected.

“Uncertainty about long-term affordability is a risk in all high-value plans,” says Ramamurthy. 

An unlimited cover may be worth considering for buyers seeking long-term financial security against medical expenses, or those having larger families. “They suit individuals and families prioritising comprehensive financial protection against high or unpredictable hospitalisation expenses,” says Agrawal. 

Goel adds that those planning to buy a ₹1 crore cover may pay an additional 1 to 2 per cent for an unlimited cover. For a younger, healthy individual living in a metro, a ₹10–15 lakh cover may suffice.

Before choosing a plan, read the policy wording to see what it covers and excludes. Check room rent eligibility, co-payments and deductibles. Within some plans, the variant determines the room category available, so look out for room rent sub-limits.

Some policies may have a waiting period of up to three years for pre-existing diseases. “Customers may also have to purchase a rider to cover the cost of consumables and outpatient department (OPD) expenses,” says Goel.

Where unlimited cover applies to only one or two claims, examine how the insurer counts claims. “Clarify whether multiple claims for the same treatment count as one or separate claims,” says Kapil Mehta, co-founder, SecureNow.

An unlimited cover is not the only way to prepare for a large medical bill. Buyers seeking a more affordable option can combine a high-cover base policy with a super top-up. 

“For most metro residents, a ₹20 lakh base policy with a super top-up of up to ₹5 crore and a ₹20 lakh deductible can be more cost-effective,” says Mehta.