Ritesh Sabharwal CFP®

W.M.W #2: The 8 Insurance traps no one warns you about

Reading time: 3 minutes - June 28, 2025

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Hey Reader

If you think your health insurance is sorted just because you have a big coverage number, think again. The real danger is in the fine print that most people ignore. Whether your HR sent you a fancy PDF or you bought your own policy, missing out on certain clauses can lead to bad surprises when you make a claim.

Most people don’t read the policy wording (it’s boring, I know!), but if you want to protect your family and your finances, today’s email is for you.

This checklist could literally save you lakhs in hospital expenses.

In this edition:

• What to check in your corporate and personal health insurance?
• 8 hidden clauses that can cost you big...

8 Clauses You Must Check In Your Health Insurance Policy

If you want to avoid last-minute shocks during a health emergency, you need to know what your policy really covers—and what it quietly excludes.

1. No Room Rent Capping

Your policy might promise ₹10 lakh cover, but if there’s a room rent cap (like ₹4,000/day), you’ll pay the difference if you choose a better room. Worse, your total bill (doctor fees, tests, nursing) often depends on your room type.

Tip: Choose a policy with no room rent capping.

Because when you are in that situation you just don't think about money and might want a private room but maybe the room price doesn't fit in your policy so you must be aware before.

2. No Co-payment

A co-pay clause means you split the bill. For example, with an 80:20 co-pay, you pay ₹1 lakh on a ₹5 lakh bill. Some policies add co-pay for older people or non-network hospitals.

Tip: Look for policies with zero co-pay, especially if you’re under 60 and healthy.

3. No Sub-limits on Diseases or Procedures

Some policies cap payouts for certain treatments (e.g., ₹2 lakh for cancer, ₹25,000 for cataract).

Tip: Avoid policies with disease-specific sub-limits.

4. Consumables—Are They Covered?

Consumables (like syringes, PPE kits, gloves) can be 5–10% of your bill. Many older policies don’t cover these, but newer ones do.

Tip: Check if your policy covers consumables.

This is something most are unaware of and so was my Uncle. He recently had a surgery and the end bill was ₹7 lakhs. He assumed all would be covered but there was a ₹75k consumables bill which was not covered in his policy. He was upset he had to pay that out of his own pocket.

5. Restoration Benefits (for Same Illness)

If you use part of your cover, some policies restore the full sum insured—sometimes even for the same illness.

Tip: Confirm if restoration works for the same illness and same person.

6. Shorter Pre-existing Disease Waiting Period

Most policies have a 2–4 year waiting period for pre-existing diseases.

Tip: Look for a waiting period of 2-3 years or less.

7. No Claim Bonus (NCB) That Doubles Your Cover

A good NCB increases your cover by 50% each year, up to 2x your original sum insured, without much extra premium.

Tip: Check your policy’s NCB clause.

8. Pre and Post Hospitalisation Coverage

Good policies cover expenses 60 days before and 60–90 days after hospitalisation (tests, medicines, follow-ups).

Tip: Don’t miss this—otherwise, you’ll pay out-of-pocket.

Quick Recap

• A high sum insured is meaningless if you miss the fine print.
• Clauses like room rent caps, co-pay, & sub-limits can cost you lakhs.
• A good policy protects you before, during, and after hospitalization.

Sneak Peek👇

Next week I tell you about “How I Fixed a ₹50 Lakh Insurance Gap for Just ₹2,500/Month”

So stay tuned!!

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