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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Non-Life Insurance Products

Caselet: Mr. Rakesh Iyer, 42, has a family floater health policy with a sum insured of Rs 10 lakh and a sub-limit of 1% of sum insured per day on room rent. His hospital room costs Rs 15,000 per day. He was admitted for 4 days and the hospital charged a doctor fee that is proportionate to room category. Which is the correct implication of the room rent sub-limit?

Room rent is capped at Rs 10,000 per day (1% of Rs 10 lakh), so the Rs 5,000 daily excess is not payable, and charges linked to room category may be proportionately reduced. The claim is not rejected and the sum insured stays intact.

  1. AOnly room rent is limited to Rs 10,000 per day, and proportionate deductions may also apply to related chargesCorrect
  2. BEntire claim is rejected
  3. CRoom rent is paid in full since the sum insured is large
  4. DThe sum insured is reduced to Rs 1 lakh permanently

Explanation

1% of Rs 10 lakh is Rs 10,000 per day, so Rs 5,000 per day of rent is not payable. Many policies also proportionately reduce charges linked to room category, such as doctor fees. The claim is not rejected and the sum insured is not permanently reduced.

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