Health insurance is vital. It offers protection against medical costs arising out of hospitalisation, diagnosis, and treatments. With an average cover ranging between Rs. 2 lakhs to Rs. 5 lakhs; it serves as a financial cushion in times of medical emergencies. Yet very often policy holders find this amount inadequate to meet emergencies. Rising inflation has pushed the cost of medical treatments sky rocketing high. Actual expenses may far exceed your existing health insurance coverage. Thus, the policy holder may have to shell out the difference from his pocket, which defies the very purpose of health insurance. So, here we will discuss about all you need to know about upgrading your existing Health Insurance Coverage.
Enhancing Your Sum Assured with a Super top-up plan
Super top-up plans have stemmed from a policy holder’s needs which enhances their existing sum assured, to meet the rising cost of medical care. A super top-up plan is typically an add-on plan that could be purchased over and above your basic health cover. An easy and cost-effective policy, it lets in upgrading your existing health insurance coverage. to meet the expenses.
By buying a super top-up plan, the additional cover that you would receive is paid out only if your expenses have crossed a pre-determined limit known as the “deductible or threshold limit”.
Deductible and Threshold limit- How does the Policy Work?
Super top-up plans work around a deductible or threshold limit. Specified at the time of purchase of your super top-up plan, it is that amount over and above which your claims would be entertained by the super top-up plan. So, you would typically need to have a basic health insurance policy in place for expenses below the threshold limit.
Look at this example:
Let us consider a health insurance policy with a basic sum assured of Rs. 2 Lakhs. To enhance this cover, a super top-up policy of Rs. 10 Lakhs is purchased. At the time of purchase, it is pre-determined that the deductible or threshold limit is Rs. 2 lakhs. To understand how claims would be paid out in such a case, let us look at three scenarios.
Scenario 1: A claim of Rs. 2 lakhs due to hospitalisation.
The claim amount would be paid out from the regular health insurance policy. The super top-up policy does not kick in as:
- The amount is well within the scope of the base health insurance policy and,
- The threshold limit for the top-up to kick in has not been reached.
Scenario 2: A claim of Rs 8 Lakhs arises due to hospitalisation
In such a scenario, it is obvious that the base health plan with a cover of Rs. 2 lakhs would not be adequate. The existing base health policy would provide cover as per its terms for Rs. 2 lakhs. The super top-up plan kicks in once the bills exceed the pre-decided threshold limit of Rs. 2 Lakhs, up to the sum assured amount. So, in this case the balance amount (8lakhs-2 Lakhs) of Rs. 6 lakhs would be paid by the super top-up plan.
Scenario 3: A claim of Rs. 12 Lakhs
Where the claim amount is higher than, the regular policy and the super top-up policy put together, a certain amount would have to be borne by the policy holder. As in the scenario, in the claim of Rs. 12 lakhs, Rs. 2 lakhs would be taken care by the regular policy. The super top-up policy would settle claims up to Rs 10 lakhs. So, the balance amount of Rs. 8 lakhs are taken care by the super top-up policy. The remaining Rs. 2 lakhs would have to be borne by the policy holder.
The Cost Factor
When you desire to upgrade your existing health insurance coverage, the most cost-effective option is a super top-up policy. Instead of purchasing another new policy, top-up policies are far easier and hassle free. Premiums are far more affordable in comparison to a regular health policy. The premium you would be paying, depends upon the deductible decided upon.
Key Feature and Conditions
- Buying from another insurer: Super top-up plans need not have to be bought from the same insurer as the basic health policy. You could buy both from different insurers.
- Individual and family floater plans: Super top-up plans could be bought as an individual plan or as a family floater plan covering spouse and children.
- Income Tax Benefits: The super top-up policy provides Income tax benefits under Section 80D.
- Super top-up plan Standard Waiting Period: The waiting period and exclusions in a super top-up policy are similar to a regular policy. Policies come with a 3- 4 year waiting period for pre-existing ailments cover.
Designed to meet the increased costs of medical care, super top-up plans work towards upgrading your existing health insurance coverage. So, when inflation pressures are high, you could upgrade your existing health plan, to ensure it covers you adequately. Once you are aware of all you need to know about upgrading your existing Health Insurance Coverage, it is much easier for you to opt for a plan.