Health Insurance, Top-Up and Super Top-Up


Recently, I met a couple in their mid 30 s. They posed an interesting question to me?What should they do to increase their medical cover without paying much of a premium over and above their already running medical floater plan?

A reason for them being so worried was quite obvious……their parents recently had to undergo a huge medical bill due to their prolonged illness and they were managing it somehow for themselves through their savings!!!

Now, what about these couples as they were employed in Private sector jobs with a very low coverage of 2.5 Lakhs!! The second problem was they were not earning a handsome salary package – despite all odds they had still managed to taken a 3 lakh floater plan for their family.

Now that’s where a where a Top Up or a Super Top Cover comes into picture. Today I shall discuss the same in detail.

Health top-up plan, it might be a new term for most of you but then knowing it well will really help you in multiple ways. Basically, a health top-up plan is a type of additional coverage for those people who already have a health insurance policy. It enhances sum insured amount at a very reasonable premium. It improves your existing health insurance policy by providing additional health coverage. A Top-up cover gets triggered once the deductible in the existing policy is worn-out. It is not compulsory to have a health insurance plan to buy top-up plan, but it is advisable to take a health insurance plan before choosing any top-up plan.

Let us take an example to understand this in a better way.
Suppose you have a health cover of Rs 3 lakh and you now realized that it’s not enough to meet the needs of a medical emergency. Buying an extra cover of let’s say 5 Lakhs means you have to pay a big amount as a premium. This is where a health top-up plan makes sense. With a health top up policy, you can get additional cover at a low premium and it can save you a lot of money.

Consider the example of Mr. Akbar who has a health insurance policy of Rs 3 lakh. He is paying an annual premium of Rs 8000/-. Unfortunately for Mr. A, he is hospitalized due to a heart attack, the treatment for which goes up to Rs 7 lakh. Now under normal circumstances, his policy would pay only upto Rs 3 lakh and he would have to pay the additional amount from his own savings or investments. Now, if Mr. A had opted for a Top-up policy of Rs 10 lakh with a deductible limit of Rs 3 lakh, this additional amount of 4 lakhs would be paid by his new policy, ensuring that he stays financially protected.

In simple words, a Top-up health insurance policy provides protection after the basic threshold limit under a normal policy is breached or I should say it gets exhausted.

A Top-up insurance policy has certain drawbacks when it comes to its implementation, which can be resolved by opting for a Super Top-Up policy. Unlike a Top-up plan which pays only if the threshold limit on a regular policy is exceeded on a single hospitalization, a Super Top-up provides cover over the threshold limit in multiple cases.

Let us take the example of Mr. Akbar again. Post treatment for his disease he suffers another one after 6 months, with the bill coming up to Rs 7 lakh, which comes outside the ambit of his top-up plan since only one claim can be entertained under its provisions. Now, if Mr. Akbar had opted for a Super Top-up plan with a cover of Rs 10 lakh and a threshold of Rs 3 lakh, this plan would pay the additional sum of 4 lakh.
In simple terms, a Super Top-up Health Insurance policy has provisions for multiple claims, which are not offered by a regular top-up plan.

So next time when you think of increasing your health cover why not think about such plans. Till then Happy Investing