Health insurance comes with a lot of technical terms that can often be confusing and one of these terms is Limit of coverage. Many people find out too late that their insurance does not cover as much as they thought it would. The reason? Hidden or misunderstood limit of coverage. Here, we aim to explain these limits clearly so you can make smarter decisions when it comes to health insurance and avoid any out-of-pocket expenses.
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Limit of Coverage in health insurance is the maximum amount your health insurance provider will pay for your medical expenses during the policy year. This limit can apply to your entire policy, specific treatments or services, like room rent or ambulance cover, and even per-day or per-claim, depending on the details mentioned in your policy. In case your treatment costs go beyond this limit, then you have to pay for it out of your pocket.
This is the total sum insured for a year. For example, if your policy has a ₹5 lakhs cover, you can only claim up to ₹5 lakhs in total.
These are specific limits within the overall cover for certain treatments or expenses. Some of the common sub-limits are:
There are some policies that set limits per day that you're hospitalized or per illness. For example, ₹10,000 per day or ₹1 lakh for a cataract surgery.
This is a rare type of limit where some policies might restrict the number of claims you make in a policy year.
Some policies offer you a restoration benefit, which means your coverage amount is refilled once your sum insured is exhausted. But, this comes with a usage limit or, it can only be applied to unrelated illnesses.
Some insurance providers use these two terms in place of each other. They might be used to describe the same thing but they are not always the same. Sum insured is the total maximum amount that your insurer will pay during a policy year for all claims combined, while Limit of coverage can refer to the sum insured, or it can refer to specific caps or limits within your policy, like room rent limits, ICU charges, or sub-limits.
In simpler terms, Sum insured is the overall cap on a policy and Limit of coverage can mean the overall cap or smaller caps within the policy. Let’s take a look at a more detailed comparison between the two:
| Limit of Coverage | Sum Insured | |
| Meaning | Maximum limit for specific treatments or the overall policy | Maximum amount your insurer will cover in a year |
| Scope | It can apply to the entire policy or particular sub-limits | It applies to the entire policy |
| Example | ₹2,000 ambulance cover or ₹3,000 per day room rent cap | ₹5 lakhs sum insured for all hospitalisation expenses |
| Amount type | Varies based on policy terms and conditions | Fixed amount decided at the time of buying the policy |
| Place in policy | Mentioned under detailed sections of the policy like sub-limits or exclusions | Clearly mentioned on the first page of the policy document |
| Effect on premium | Indirectly affects premium as fewer or lower sub-limits usually means higher premiums | Directly affects premium as higher sum insured means higher premiums |
Health insurance terms can be tricky, but once you get the hang of terms like 'limit of coverage,' you’re in a much better place to understand your policy coverage and avoid any unpleasant surprises at the time of claims. Taking a few extra minutes to understand it can help you choose the best health insurance plan for you and your loved ones.
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Reviewed by Dr. Harshita Dahiya 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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