Considering buying an additional health insurance policy to buff up your health cover? Look, instead, at top-up or super top-up plans.
These plans offer a more economical and a better solution for those who are already covered under the group health plan of their employer or hold an individually-purchased health policy, but want to increase their insurance coverage.
A few years after buying your health insurance policy, you realise that you are not adequately insured and need a bigger sum assured to ensure that your family is financially well-protected. You can either opt for another insurance policy, which is usually an expensive option, or you can go for the top-up or super top-up plans.
‘Top up’ and ‘super top up’ are plans designed to provide an additional health insurance cover, over and above your existing plan. They play the role of upgrading the sum assured of the base plan, providing you extra cover to meet rising medical costs during inflation.
A top-up policy is primarily a deductible plan; there’s a fixed initial amount after which the insurance kicks in.
So, if you have a health insurance policy of ₹5 lakh, you can go in for a top-up plan with a sum assured of ₹15 lakh with ₹5 lakh as the deductible. This will give you an extra insurance cushion of ₹10 lakh over and above your base plan — the initial ₹5 lakh will be covered by your base policy and the next ₹10 lakh by the top-up. The deductible limit makes these plans cheaper.
However, in case of top-ups, every claim is considered individually. That is, if you make four claims of ₹2 lakh, ₹4 lakh, ₹3 lakh and ₹6 lakh in a year, your top-up policy will only reimburse you ₹1 lakh. What then?
This is where a super top-up policy can come to your rescue. In a super top-up, all claims are aggregated within a policy year.
So, let’s continue the example above and, say, you took the same policy as a super top-up. Here’s comparing this to the scenario if you took the top-up.
For a claim of ₹2 lakh, your base policy will suffice. Then, say, you make a further claim of ₹4 lakh in the year. About ₹3 lakh of this will be met by the base policy, after which the sum assured under the policy is exhausted. The remaining ₹1 lakh here will still not be met by the top-up plan as your entire claim amount (₹4 lakh) should be above the deductible limit of ₹5 lakh.
With the super top-up though, this ₹1 lakh will be met, since it takes into account your total claim amount during the year. This works out to ₹6 lakh (the first ₹2 lakh and the second ₹4 lakh) and so above the deductible threshold.
Going a step further, let’s say you made yet another claim in the year, this time for ₹6 lakh. Your top-up plan pays ₹1 lakh, the amount exceeding the deductible. Your super top-up will pay the whole ₹6 lakh.
The annual premium to be paid on super top-ups are also usually comparatively lower. They also need not be taken from the same insurer as your base policy.
The costsNow, suppose you currently have a ₹5-lakh health cover, and want to upgrade the sum insured to ₹15 lakh.
Buying another policy for ₹10 lakh involves a premium of around ₹6,820 for a 30-year old male (currently the cheapest health cover by Religare Care). A top-up of the original policy will cost ₹3,708, with a ₹5-lakh deductible (The cheapest now is Star Super Surplus).
The cheapest super top-up involves a ₹2,781 premium (Apollo Munich Super Optima).
Of course, premiums do vary with plans. Currently, three health insurance companies, including Apollo Munich (Optima Super), L&T (myhealthmedisure super top-up) and Religare (enhance), offer super top-ups. We’re expecting more to launch this product as consumer awareness increases.
The writer is Chief Marketing Officer, PolicyBazaar.com