Health insurance top up serves as an additional layer of protection alongside your primary health insurance.
HEALTH INSURANCE
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These policies provide the necessary medical coverage if the coverage limit of your current health insurance policy is depleted. If you believe that your current coverage amount is inadequate, a top-up health plan is a valuable choice.
What are Top up health insurance plans?
Top-up health insurance plans are supplementary indemnity policies designed to offer extra medical coverage to individuals who already have an existing health insurance policy or an employer-provided mediclaim policy. These plans enable individuals to have their medical expenses covered even after they have depleted the sum insured of their regular health insurance policy. However, top-up plans come with a compulsory deductible or threshold limit, and coverage kicks in only after the insured person has paid the deductible amount.
Medical insurance top up plans are cost-effective and more budget-friendly than basic health insurance. They can be purchased in addition to the health coverage provided by your employer, providing an additional sum insured to assist you in managing unexpected medical emergencies if you believe that your current medical policy may not be sufficient.
How Does Top-ups in Health Insurance Work?
Top-up health insurance operates by coming into effect when the sum insured in your standard health policy is depleted. When purchasing the top-up policy, the policyholder selects a deductible amount. The top-up insurance plan can only be claimed once you have paid this deductible amount.
You can cover the deductible either from your own funds or through another health policy. However, it's essential to exceed the deductible limit in a single hospitalisation bill. Furthermore, you are allowed to make a claim on your top-up insurance plan only once in a policy year.
Let’s understand with the help of an example:
Consider you hold a health insurance policy with a sum insured of Rs 5 lakh, and you opt to purchase a top-up insurance plan of Rs 10 lakh with a deductible of Rs 2 lakh. Now, suppose you were hospitalised due to an illness, and the hospital bill amounted to Rs 7 lakh. In this scenario, your base policy's sum insured of Rs 5 lakh would be entirely utilised. Additionally, you can make a claim on your top-up plan since your base policy's sum insured will cover the deductible amount.
If you file a claim for Rs 7 lakh, Rs 5 lakh will be covered by your primary health policy, and the remaining Rs 2 lakh will be covered by your top-up plan.
What are the benefits of buying top-up health insurance?
Enhanced Coverage: A top-up plan allows you to bolster your medical coverage, ensuring you can manage unexpected medical expenses even after depleting the sum insured in your primary policy.
Lower Premiums: Top-up insurance plans generally come at more affordable premiums compared to standard health insurance policies because the deductible amount reduces the insurer's liability.
No Restrictions or Sub-limits: Many top-up plans do not impose restrictions or sub-limits on hospitalization expenses, including room rent and doctor fees.
Easily Convertible: Top-up insurance plans offer flexibility, allowing you to convert them into regular health plans during the renewal process.
No Pre-policy Screening Required: In most cases, top-up plans do not mandate medical check-ups for the insured, up to a certain age, prior to policy purchase.
Tax Benefits: You can claim tax benefits under Section 80D of the Income Tax Act on the premium paid for your top-up plan.
Peace of Mind: Even if your current health policy is exhausted when making a claim, a top-up plan ensures you have peace of mind, as it covers any remaining medical bills.
Is there a difference between Top-up and super Top-up health insurance?
Top-up insurance and super top-up insurance plans share similarities but have differences. They both offer additional medical coverage when your primary policy's sum insured is exhausted, yet super top-up insurance offers added advantages.
Top-up insurance allows a single claim in a policy year after the deductible is met. In contrast, super top-up insurance permits multiple claims within a policy year. Additionally, with top-up insurance, you must surpass the deductible limit in a single hospitalisation bill. On the other hand, a super top-up insurance plan allows you to combine multiple hospitalisation bills to meet the deductible limit.
For instance:
Let's say your top-up insurance has a deductible/threshold limit of Rs 3 lakh. If you make two claims within a year, one for Rs 1 lakh and another for Rs 2 lakh, your top-up plan won't be triggered. Similarly, in a family floater plan, if two members are hospitalised, each incurring a hospital bill of Rs 2 lakh, the top-up policy won't be activated.
However, if a hospital bill amounts to Rs 5 lakh, crossing the deductible limit in a single hospitalisation bill, the top-up plan will be triggered.
Conclusion
Selecting a top-up health insurance plan is a wise decision to enhance your medical coverage and prepare for unexpected healthcare expenses.
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