All That You Should Know about Health Insurance Top-up Plans

A health insurance plan covers your needs during uncertainty. But what if the hospital bills exceed your insurance cover amount? Will you pay from your pocket? That’s where a top-up plan comes in handy. With it, you can avoid this situation.

  • What are top-up plans in health insurance policies? 
  • How do they work? 
  • How they are different from super top-up policy?
  • And what are their benefits? 

Keep reading to know the answers. 

Top-up Plan – What It Is

A top-up plan is a type of insurance policy that is designed to cover hospitalization expenses. The coverage kicks in only after the threshold limit (deductible) is crossed. A deductible is a share of the claim amount. It is not covered by the insurance company The policyholder has to pay it before the top-up policy benefits kick in. 

A top-up product serves like a stephney to your health reimbursement policy after the sum insured limit is exhausted. Regular health insurance reimburses hospital bills up to the sum insured while a top-top plan provides coverage amount after a certain threshold is reached. 

Top-up Plans and Super Top-up Plans – Know the Difference

Top-up plan: 

  • A top-up plan is applicable on per claim basis
  • It gets activated only when the claim amount is more than the amount covered by your regular health insurance

Super top-up plan:

  • Super top-up plan pays hospital bills even in case of repeated claims when you exhaust the cover provided by your base health insurance. 
  • It works at an aggregate level
  • It kicks in when you have used your base policy amount
  • Unlike in a top-up plan, no threshold at a particular claim level exists

Let’s understand top-up and super top-up plans with this example: 

Nikhil and Gaurav are hospitalized. Nikhil has a top-up plan and Gaurav has a super-top-up policy. Their plans cover a basic health policy of Rs  3 lakh. Say the claims raised to both for a particular year are Rs 3 lakh, Rs 1 lakh, and Rs 4 lakh.

Number of Claims in a Policy YearClaimsNikhil ( (Regular health insurance of ?3 lakh + ?5 lakh top-up plan)Gaurav ((Base health insurance of ?3 lakh + ?5 lakh super top-up plan)
1s ClaimClaim 1 – ?3 lakhRegular health insurance will coverBase health plan will cover
2nd ClaimClaim 2 – ?1 lakhNikhil will have to pay the entire amount. Since the claim doesn’t exceed the cover amount of health policy, the top-plan will not cover this claim. A top-up plan works on a per claim basis and it kicks in only when the claim amount is more than the cover of your health insurance. Meantime, Nikhil already exhausted his health insurance coverage in the previous claim.       The super top-up plan will cover. It pays the extra amount when the aggregate amount exceeds the cover amount of the basic health plan in case of more than one claim.
3rd ClaimClaim 3: ?4 lakhThe top-up plan will cover Rs. 1 lakh, which is the additional amount over his base health policy coverage amount. Rest, ?3 lakh has to be paid by Nikhil as he has already consumed his cover in the previous claim.The super top-up plan will cover Rs. 4 lakh.

Top-up Plans – Know Their Benefits 

Cost-Effective – A top-plan is more affordable than increasing the base cover of your existing health insurance. Say, Nikhil has health insurance of Rs. 5 lakh for which he is paying an annual premium of Rs. 8,000. But, the coverage amount is not enough for Nikhil. He feels he should have 8 lakh as the coverage amount. In this case, if Nikhil decides to increase the cover of his existing plan from Rs 5 lakh to Rs 8 lakh, the premium amount will be almost 12,000 annually.

In another case, if Nikhil has an insurance policy, then the premium amount for the 8 lakh insurance coverage will be generally 1,000 per lakh cover. So, for any additional 3 lakh cover, you will have to pay only Rs. 3,000. The total premium will be 11,000.

Increased Coverage Limit – Do you want to increase the sum insured of your health insurance? You will be allowed to increase to a certain extent. Each insurer determines up to what limit they will allow insured to increase their coverage amount. By purchasing a top-up plan or super-top plan, increasing the coverage amount to meet your medical needs is up to you.

Top-up Plan: How to Choose It 

Deducible determines the plan premium. However, the top-up plans bridge the ga between existing policies and actual costs. The motive is not to duplicate but grab an extra cover at an affordable cost. So, nothing to worry about exclusions, like dental treatment and day care. They will be maintained by your base plan. However, check the following points before choosing a top-up plan.

  • Check the deductible criteria for a single illness
  • Waiting period for pre-existing diseases,
  • Limits inclusive of donor expenses, pre- and post-hospitalization expenses
  • Understand the criteria for a single illness.
  • Make it clear whether the policy mandates per-claim deductible or overall deductible
  • Check who all can be covered. 

Bottom Line: 

Top-up plans in health insurance give you a feasible way to increase the claim amount of your health insurance coverage amount. However, reading the policy wording carefully is paramount to understand the terms and conditions. This will stop you from facing any difficulty when purchasing a health insurance top-up policy. 

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