With medical inflation rising every year, your existing health cover may not be enough to meet your medical expenses, and buying a new health insurance cover can be expensive. In a situation where your hospital bills exceed your health insurance coverage, you will have to pay the additional amount from your pocket. To avoid such a situation, you can increase the cover of your existing plan by combining an additional health insurance policy with your existing health insurance policy. This additional health insurance policy is called a top-up health insurance plan. During hospitalisation, if the claim amount is more than the coverage of your health insurance, a top-up plan can be used to pay the extra amount.
In this article, we will discuss everything about top-up plans.
A top-up health insurance plan supplements an existing health insurance cover and provides coverage beyond the cover limit of the existing policy. A top-up plan has a mandatory deductible and the coverage is provided only after the deductible is paid by the insured.
There are two types of a top-up plans: a standard top-up plan and a super top-up plan.
Top-up plan - In this type of policy, the amount that is deducted is applicable on per claim basis and the policy comes into effect if the claim amount is more than the cover amount of the base policy.
Super Top-up plan - In this type of policy deductible is applicable on an aggregate basis and the policy comes into effect when a policyholder uses the entire cover of his health insurance plan due to repeated claims in a year.
Top-up health insurance plans are affordable alternatives to enhance your medical insurance coverage. Let us understand with an example. Suppose you have a health insurance cover of ₹ 10 lakhs, you supplement it with a top-up cover of ₹ 20 lakhs which has a deductible of ₹ 10 lakhs. During hospitalisation, your total medical bills are ₹ 15 lakhs which is 5 lakhs more than your existing health cover. So these extra 5 lakhs will be covered by your top-up plan after the deductible of ₹ 10 lakhs is paid from the base policy.
Riders are added to your existing health insurance plans to avail of additional benefits on payment of additional premiums. These riders can be maternity benefits, critical illness cover, room rent waiver, etc. On the other hand, a top-up plan is a health insurance plan you buy in addition to your existing health cover for an increased coverage amount. A top-up plan is affordable compared to the riders that we add o the base policy.
If you opt for a rider you get increased coverage only upto a certain limit and for specified benefits only. However, with a top-up plan, you can choose the cover amount as per your requirement and you can utilise it as you want. Note that a top-up plan has a waiting period as you purchase it as a separate plan and a no-claim bonus is not available with a top-up plan.
There are many reasons why you should consider buying a top-up health insurance plan.
Top-up plans are affordable and a cost-effective way to increase your existing health cover.
A top-up plan comes in handy during medical emergencies and helps in dealing with medical inflation.
A top-up plan is available on an individual as well as family floater basis.
It can be purchased as a stand-alone policy in case you don’t have any health insurance plan and can be converted into an individual health insurance plan.
A top-up plan can be purchased from any insurance company be it your existing insurance company or a new insurance company.
Like any other health insurance plan, a top-up plan also provides tax benefits u/s 80D of the Income Tax Act.
A top-up health insurance plan provides better coverage for senior citizens.
If you have health insurance cover from your employer which is not sufficient, you can buy a top-up plan for increased coverage.
No pre-policy medical check-up is required with a top-up plan.
If your existing health cover has reached its limit, the claim for the existing policy and the top-up plan can be filed together.
To find a good top-up plan, here are a few points to consider.
Always opt for high deductibles and try to match the deductible with the sum insured of your existing plan, so that the top-up plan can be used as soon as the standard health coverage is exhausted.
While selecting a top-up plan, ensure that coverage or benefits available are not the same as the base health insurance and look for benefits not available in your base health plan.
Try to choose a plan such that the exclusions of one plan are covered in the other plan.
Check the waiting period for pre-existing conditions or diseases, pre, and post-hospitalisation expenses, etc.
Check whether the plan provides coverage for your family members such as parents, spouse, and children.
Read the policy terms carefully and select a plan that does not overlap with your existing health insurance cover so that you get wider coverage with your top-up plan.
Check the claim process and premium costs when selecting a top-up plan.
Top-up health insurance is an excellent way to beat medical inflation affordably. It bridges the gap between standard health coverage and emergency medical expenses. Anyone with a history of certain medical conditions should opt for a top-up health insurance plan.
