Know About Proportionate Clause in Health Insurance

Let’s uncover – The proportionate clause in health insurance!

The claim settlement of your medical policy may not go your way if you are not careful. It turns out that quite a lot of people are disgruntled with their policies because the claims were settled partially and they were left bamboozled. At the core of the problems lie the proportionate clause in health insurance, and the whole room rent sub-limit bind. Read on to know how you can escape without any glitches.

The proportionate clause in health insurance

Sub-limits are the segments that build up the entire sum insured (the payout of your health insurance policy). They signify the extent to which your policy will pay for different aspects of your treatment such as room rent, nurses’ or doctors’ fees, charges for surgery, price of medicine, etc. No matter how much sum insured you are entitled to, you cannot exceed the cap or the sub-limit.

For example, if your room rent sub-limit is INR 2000 per day, you should adhere to it. If it exceeds by even a fraction, you’d have to pay the excess from your pocket.

In other words, a percentage will be deducted from your sum insured to meet each of the sub-limits. You can structure the sub-limits any way you like. There are no strict IRDA rules on it. It all depends on your insurer. There are health policies that come without sub-limits. But they are much more expensive.

How to calculate proportionate deduction?

The room rent sub-limit is really the most important. That is because insurers benchmark the reimbursement of the other expenses to the room rent. Usually, you are advised to cap the room rent at 1% of the total sum insured.

If your room rent actually exceeds your sub-limit, it will have an adverse effect on the rest of the payment too. The insurer will calculate the percentage by which you have gone beyond the limit, and proportionately deduct sums of money from the amount set aside for other sub-limits. This is called the proportionate clause in health insurance or proportionate deduction.

Suppose your room rent takes up 25% more than what was allotted for it, all the other sub-limits will go down by 25%. So you are incurring quite a loss here because your insurer pays your sum insured partially.

Naturally, this crafty little trick causes a lot of aggrievement and resentment and makes people lose their faith in health insurance policies.

What should you do?

If possible, opt for policies that don’t tie you down with sub-limits.

If you have to purchase a sub-limit policy, then enquire if the room rent sub-limit has a bearing on the rest of the claim settlement. If yes, steer clear from it.


All health insurance policies clearly stipulate sub-limits (the ones that contain them). So read the fine print carefully. Consult insurance experts if needed. This is not something you should rush into. Ponder everything out before signing the dotted line.

Now that we have laid the foundation for your awareness about the proportionate clause, delve deeper and learn about some other nitty gritties of health insurance, from another one of our blogs on the same.



  1.     Economic times
Health Insurance for Parents

Looking to buy health insurance for parents? Read this first


With the state of the economy and astronomical costs of procuring health care, everyone requires a medical policy. If your parents are senior citizens who aren’t covered by any health policy, they need one right away. But, before you buy health insurance for parents, you need to ponder over a few important factors. Policy is as good as the perks it offers. Which one would fit your parents’ requirements? 

Your options

A family floater plan is an excellent idea but only if your parents are yet to reach their senior years. Also, these plans don’t cover pre-existing illnesses. And many stipulate an age cap. Others charge a high premium.   

If you have included your parents in a corporate or group insurance policy, then also you should consider a separate policy for them. Because the group insurance policy will cease being operational once you leave the company.

If your parents are in their 60s, they would benefit more from senior citizen plans. Many insurers in India offer specific plans targeted for the elderly that accommodate the unique needs of these people. Your parents can also utilize tax benefits amounting up to INR 50,000, thanks to Section 80D of the Income Tax Act. 

Confused with the options? To simplify matters, here are a few things you and your parents should go over. This would help you narrow down your list of potential health insurance plans. 

1. The age of entry

Most insurers put a cap on the entry age at 65 years. That means you will not be able to buy health insurance for parents once they are past that age. But not all insurers have this entry age stipulation. You need to hunt down this kind of policy. Or your parents can also opt for senior citizen plans.

2. The coverage offered

Like with all health plans, it’s important to closely read the list of exclusions. Many reputed insurance policies leave out basic healthcare facilities. But more than that, you need a policy that covers pre-existing illness, if either of your parents has already contracted an illness. Also, check if the policy covers critical illnesses.

3. The sum insured

This is a primary concern when it comes to purchasing medical insurance for parents. The sum insured will be the reimbursement your parents will be getting if they are hospitalized. The higher the quantum, the better. 


If you want to buy health insurance for your parents, then you and your parents should analyze the factors we mentioned so that you can find the perfect fit.

Leave no stone unturned when it’s about Health insurance for your parents. Read

our next blog on health insurance for senior citizens. 


Financial Express

Tele-Consultation is Changing Healthcare in India

As the average Indian becomes busier, the healthcare industry is molding itself to the sign of the times. Thus evolved the field of tele-consultation, providing access to healthcare anytime, anywhere. Learn more about tele-consultation through our white paper.


Know why Health Insurance

5 Reasons why you can’t do away with health insurance

You might have read plenty of blog posts on how a wholesome diet and a strict exercise regime can preserve your health for ages. But, not many people talk about another way of safeguarding your health- the right health insurance policy that comes to your aid at the time of medical emergencies. Read on to know why buying a medical policy is equivalent to investing in health.

It has you covered

Whenever an unfortunate medical emergency crops up, your medical policy will stand up for you. Even if you do not have ready cash in hand, you or your family won’t have to run from pillar to post trying to mobilize some money. That is because your insurance policy will take care of all the bills such as-

  • The doctor’s and nurses’ fees
  • Room rent when you are hospitalized
  • Both pre and post hospitalization charges
  • Bills incurred in the aftermath of treatment, surgery, therapy etc.
  • Cost of prosthetic devices
  • Cost of medicines

You need it if you are starting a family

Most health insurance plans offer you maternity benefits as an add-on plan. If you are embarking on the journey of parenthood, you must realize that there will be a plethora of tests for the mother-to-be, which makes pregnancy an expensive affair. So investing in a medical policy is intricately linked with ensuring the health of both mother and child, because it will pay for-

  • Consultation fees of gynaecologists and doctors 
  • Childbirth expenses (includes both cesarean and normal delivery)
  • Hospitalization fees and room rent
  • Health check-ups, and both pre and postnatal tests 
  • Tests to determine the health of the new-born

It gives you access to good hospitals

A chief draw of health insurance policies is that if you fall sick, you can seek treatment at premium hospitals since these policies are linked with renowned hospitals called network hospitals. Moreover, you also get the benefit of cashless treatment. You will not have to pay any money upfront, because your insurer will settle the bill once your doctor discharges you.

It even covers outpatient department charges

Often enough, people hesitate to visit doctors for minor illnesses like common cough and cold, flu, allergies, etc. because they don’t want to spend on consultation fees. But with medical policy, you can consult a doctor at any OPD without worrying about hefty consultation fees.

You get the benefit of regular health check-up

We cannot emphasize enough on the importance of pre-emptive health check-ups. Many people wonder why they should go for a health check if they are in the pink of health. You should because not all deadly ailments show signs or symptoms in the early stages, and when they do, it might be too late. But a regular check-up will detect any illness at the earliest, and you can start your treatment as soon as possible. This, in turn, will increase the chances of complete recovery. 

Should you opt for a family health insurance plan or an individual plan?

If you live alone or your parents/spouse already have a health scheme, then you can be happy with health insurance plans for individuals. But if you want your whole family to come under one plan since it is logistically simpler and hassle-free, then buy a family floater plan which will look out for your entire family (parents, spouse, children, and dependent siblings). Even if more than one family member were to fall ill, your floater plan would pay for their treatment (as long as the quantum of the sum insured is sufficient).   


Health insurance policy is one such investment that will benefit you all throughout your life. The premium you pay today might save your life one day. 

Now that you know why health insurance is important, it’s time to find out which policy is best suited for you. Read our blog.


Tax Guru