Things to Consider in Your Health Top-Up plans
Mr.Verma was a cautious planner and had taken a health cover for his family. He believed that he had all medical expenses taken care of when life threw a Googly at him, and he suffered a massive heart attack and had to be hospitalised.
The medical bills were beyond his current health insurance coverage, and he had to dip into his retirement funds to pay them. Mr.Verma could have avoided disturbing his savings if he had opted for a top-up health insurance plan along with the basic medical cover.
What is Top-up Plan?
Simply put, it’s an add-on health insurance cover that comes to your rescue when medical expenses go beyond a certain amount that is known as the deductible. In most cases, the purchaser of a Top-up plan already will have a health cover as well and they will preferably set the sum insured of the health cover as the deductible while purchasing the top-up plan.
Let’s assume that your employer provides you with a health insurance cover of up to 3 lakhs. When you buy top-up coverage, you will most certainly set 3 lakhs as the deductible so that any medical bills beyond 3 lakhs will be paid by this plan. For instance, if you’re hospitalised, and your total medical expenses are around 5 lakhs, 3 lakhs will be paid by your insurer and the rest by your top-up insurer.
Let’s take a look at the Benefits of Top-up Health Insurance Plans
- Buying top-up cover is cheaper than extending a basic health insurance plan to cover higher expenses.
- Easy to buy and you can purchase this plan from any insurer. For instance, your basic health insurance policy and the top-up cover can be from two different insurance companies.
- The top-up cover is available for both individuals as well as families.
- You can claim tax-deduction under 80D when you buy a top-up cover.
Top Three Factors to Consider when choosing a Top-up Plan:
This is the threshold limit below which the top-up insurer will not bear your medical expenses. For instance, if you have a top-up plan with a deductible of 4 lakhs, all medical costs up to four lakhs have to be borne by you or paid by your primary health insurer. You are eligible for top-up mediclaim policy only for expenses that go beyond this deductible.
The Claim Process & Waiting Period:
Easier the claim process, the better it is for the policyholder. Additionally, look for insurance providers who have less waiting time for existing diseases and great customer support.
Network Hospitals & Wider Coverage:
Look for insurance providers who have a wide network of hospitals across the country. Also, additional features like maternity cover, lifetime renewal, and pre & post hospitalisation expense covers are great add-ons.
The Major Drawback of Top-up Plans – The Criteria & Clauses
Let’s take a look at the major drawback of top-up plans with the help of an illustration. Let’s imagine that you have a base health cover of 5 lakhs and a top-up cover of 5 lakhs.
- Scenario A: You are hospitalised and are charged a bill of 8 lakhs.
- Scenario B: You are hospitalised twice during the insured period and are charged two separate bills of 4 lakhs each.
Your top-up cover kicks in only for scenario A and not for B. This is because, in the latter scenario, your medical bill hasn’t crossed the deductible limit.
This is where super top-up plans come to your rescue.
What’s a super top-up cover?
Unlike a regular top-up cover, this plan takes into account the entire amount you spend in a year on medical expenses, irrespective of the number of times you’re hospitalised.
Why opt for top-up or super top-up covers?
With mounting medical expenses and increasing rates of lifestyle diseases, the coverage provided by your insurance plan is often not sufficient. You have two choices before you.
- Increase the coverage of your primary health plan by paying a higher premium
- Or buy a top-up or super top-up health insurance for comparatively lower premium costs for the same total sum insured.
Stay protected with the right top-up Covers
Top-up plans are excellent supplements to add to your regular health coverage and provide you with two significant benefits – lower premium costs and higher sum insured. They are a great boon for people with lifestyle diseases that require frequent hospitalisations and senior citizens.
Make sure to use online health insurance top-up plan comparison tools to find the right top-up policy that suits your specific requirements.