Why Should You Consider Top-Up Health Insurance Plans? 

What Are Top-up Plans In Health Insurance? And Should You Buy It?

A health insurance top-up covers expenses once a certain threshold is reached, whereas a regular policy reimburses medical bills up to the insured amount. 

Simply put, the insurance will cover your hospital bills up to the predetermined sum insured limit. On the other hand, the top-up won’t begin until a particular threshold has been reached, like Rs. 2 lakh. It will cover the claim’s additional cost. 

For persons who already have an individual health plan or employer-provided mediclaim, a top-up health policy provides additional coverage. It is for the reimbursement of costs associated with a single disease that is beyond the scope of the current insurance.

Assume you have a Rs. 5 lakh insurance policy. But given the rising expense of healthcare, you realise that this won’t be enough in a serious emergency and wish to increase it by an additional Rs 5 lakh. 

You have two options: either purchase a separate health insurance policy (costing about Rs 6,000 per year) or ask your insurer to enhance the plan by Rs 5 lakh. Both choices are pricey. On the other hand, a top-up plan for Rs 5 lakh will only cost Rs 2,000 per year. 

Understanding what is top-up in health insurance helps to enhance the coverage without paying too much. 

What’s on offer?

Many people conflate health top-ups with additional benefits like hospital cash, critical sickness, and personal accident coverage. Top-up health plans are actually indemnity insurance that offers the same advantages as standard reimbursement plans. 

The high deductibles that make these plans less expensive are the only distinction. The base insurance lowers risk for the insurer. Thus, the underwriting can be a little different. *

While top-up health insurance covers all hospitalisation-related treatment costs, riders in standard policies only cover a few serious conditions. Moreover, top-up plans are independent covers that may be purchased separately from the existing policy, whilst riders or add-on covers are a component of specific policies and can only be taken with them. This implies that you can purchase a standard hospitalisation reimbursement plan as well as top-up coverage from various insurers. 

You may combine claims under your indemnity policy and top-up plan for a single hospitalisation. The top-up plan threshold is the only requirement that must be satisfied.

Criteria and clauses 

A health insurance top-up often only covers single incident hospitalisation and has a high deductible. That is, the top-up plan can only be used if your hospital expenditure during a single hospitalisation surpasses the deductible. For instance, the top-up plan will not be activated if a person has a top-up cover with a threshold of Rs 3 lakh and is hospitalised twice in a year with costs totalling Rs 2.5 lakh and Rs 2 lakh, respectively. 

The same is true of a floater plan, wherein two members are hospitalised and incur separate medical expenditures of Rs 2.5 lakh each. 

A single illness clause may also be present, along with detailed instructions on what constitutes a single illness. 

Picking a plan

The cost of the plan will decrease as the deductible increases. Health insurance top-up plans, however, are designed to fill the gap between current policy and real expenditures. Instead of duplicating, the goal is to affordably purchase more protection. Therefore, exclusions like those for daycare and dental care won’t matter much because your base health policy will cover them. 

However, be sure to grasp the deductible requirements for a single illness, the waiting time for pre-existing conditions, the restrictions that include donor expenditures, and the pre and post-hospitalisation costs. *

There should be clarity as to whether the plan specifies per-claim deductible or total deductible. Check to see if everyone can be covered.

* Standard T&C Apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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