Your policy says 100% cover, but here’s when that doesn’t mean everything

On a quiet Sunday morning in Bengaluru, a 42-year-old software engineer sat in a hospital billing room staring at an estimate she hadn’t expected. Her health insurance policy clearly stated “100% coverage.” Yet she was being told she would still have to pay nearly ₹60,000 out of pocket.

“But it says full cover… how is that possible?” she asked, confused.

The answer lay not in the headline promise, but in the small conditions she had never paid attention to room-rent caps, sub-limits, and clauses that quietly shape what “100%” actually means.

Her situation is far from unique. Across India, thousands of people walk into hospitals with confidence and walk out surprised, not because hospitals overcharged, but because their policies under-covered in ways they never realised.

The Illusion of “Full Cover”

When people see 100% coverage, they often assume the insurer will pay the entire hospital bill. But in reality, insurers pay 100% of what the policy allows, not necessarily what the hospital charges.

That difference creates the gap.

The three clauses that most often shrink “full cover” are:

• Room-rent limits
• Co-pay clauses
• Treatment or procedure sub-limits

Each reduces the insurer’s liability. Together, they can significantly increase a patient’s share of the bill.

Room-Rent Limits: The Hidden Cost Multiplier

Room-rent caps are the biggest cause of bill shocks.

If your policy allows a ₹4,000 room but the hospital only has rooms at ₹6,000 or ₹7,000, the impact goes far beyond the room charge. Almost every associated cost like doctor visits, nursing, surgeries, tests is linked to the room category.

So if your room is 30% costlier than your policy allows, your entire bill can become 30% costlier, and the insurer covers only their proportion.

That’s exactly what happened to her. The difference seemed small when she chose the room. By discharge, it had quietly snowballed.

Co-Pays: Sharing the Bill Whether You Plan To or Not

A co-pay clause means you must pay a fixed percentage of the claim 10%, 20%, sometimes more.
It is common for:

• Senior citizens
• People with pre-existing conditions
• Policies bought at older ages
• Certain city or hospital categories

So even with “full cover,” a ₹4 lakh bill can mean paying ₹80,000 yourself if your policy has a 20% co-pay. Many customers only discover this clause during claims, not at purchase.

Sub-Limits: When Treatment Caps Reduce Coverage

Sub-limits restrict how much the insurer will pay for specific procedures or services.

Common caps include:

• Cataract surgery limits
• Maternity caps
• Implant or prosthesis limits
• Ambulance caps
• Daily room/ICU limits

So even if your total sum insured is high, a sub-limit can reduce what you receive for certain treatments.

Why These Gaps Exist

Insurance documents are long, technical, and rarely read fully. So people trust the larger headline 100% cover and assume it protects them from everything. But true protection depends not on the headline, but on the fine print that determines how the policy behaves during a real hospitalisation.

How to Read “100% Cover” More Accurately

Instead of asking, “Will my insurer pay everything?”
Ask: “Does my policy have caps that restrict this ‘everything’?”

A truly protective policy usually has:

• No room-rent limits
• No treatment sub-limits
• Low or zero co-pay
• Clear exclusions
• Reasonable waiting periods

These features ensure that 100% means what you think it means. Because health insurance isn’t just about what it promises. It’s about what it covers without conditions. Understanding that difference can save families from unexpected financial stress when they are already dealing with a health crisis.

(Views are personal; the author is Joint Chairman and MD at BajajCapital Ltd)