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The Most Effective Way to Increase Your Health Cover

Aniket Thakkar Aniket Thakkar 15 February 2016

Sometimes, a basic health cover may not hit the spot considering the upsurge in the healthcare costs. In such situations, Top Up plans could be your sole respite. Find out how.

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A valid health plan - a requirement for all and sundry in today’s age where diseases and ailments are on the rise and so is the associated cost of treating them. Every individual, rational enough to build a portfolio, is buying a health insurance plan to protect himself against the financial implications of medical emergencies. Are you among them? Have you included a health insurance plan in your financial portfolio?

Kudos to you if you answered in the affirmative but the rationale of this write-up is not to educate you about having a health insurance plan. If the increasing penetration of health insurance products is anything to go by, most of you out there already know the importance of having a health insurance cover. But, do you know the quantum of cover that you should have? What do you think is the optimal amount of cover that you should invest in - Rs.2 lakhs, Rs.5 lakhs or Rs.10 lakhs? While experts say that the coverage amount depends on your lifestyle and the people covered, don’t you think Rs.2 lakh cover will not be sufficient for covering either you or your family?

The whole purpose of having a health plan is to provide for hospitalization expenses and yet in today’s age of medical inflation, a small coverage is ridiculously insufficient. A higher coverage is necessary but with a higher coverage comes the inevitably higher premium which becomes difficult for people to afford. So what to do about such a dilemma? Thanks to the innovative ideas of health insurance companies, plans have been launched that aim to increase your coverage along with being easy on your pocket. So, when you are buying a health plan, supplement your cover with either a top-up plan or a super top-up plan. Though a top-up plan also aims to increase the coverage amount, a Super Top-up plan makes more sense. To know why, first let us understand in brief what are top-up and super top-up plans.

Both top-up and super top-up plans supplement the coverage at lower rates. They have a deductible limit and any claim exceeding the deductible limit is payable by the company. For instance, if a top-up or a super top-up plan of Rs.5 lakhs has a deductible of Rs.1 lakh, then only claims exceeding Rs.1 lakh will be honored by the top-up and super top-up plans.

Top-up v/s Super Top-up Plans

To understand why a Super Top Up plan is more favorable than a simple Top Up Plan, let’s evaluate the following illustrations:

  • Case 1 – Say Mr. A has a health plan of Rs.2 lakhs and to supplement his cover he buys a top-up plan of Rs.5 lakhs which has a deductible limit of Rs.2 lakhs. In case Mr. A faces a claim of Rs.2.5 lakhs, Rs.2 lakhs will be paid by his health plan while Rs.50, 000 will be paid by his top-up plan. Even if the claim amounts to Rs.5 lakhs, the extra of Rs.3 lakhs will be met by the top-up plan.

  • Case 2 – In the above scenario, suppose Mr. A faces two claims in a policy year, one amounting to Rs.175, 000 and the other of Rs.1 lakhs. In this situation, in the first claim, the base health plan will pay the entire amount. In the second claim, Rs.25, 000 left in the base policy will be paid and since the claim is lower than the deductible limit of Rs.2 lakhs, the top-up plan will not be triggered. As a result, Mr. A will have to pay the remaining Rs.75, 000 out of his own pocket because the health plan is exhausted and the top-up plan is not triggered.

  • Case 3 – Mr. B has a similar plan of Rs.2 lakhs and instead of buying a top-up plan, he buys a super top-up plan of the same amount and deductible limit. Let us assume that Mr. B also faces similar instances of claims as Mr. A. In the first instance of claim, Mr. B’s super top-up plan will also pay Rs.50, 000. However, in the second instance, both the claim amounts will be added and then compared to the deductible limit. Since the aggregate amount of both claims is Rs.2.75 lakhs, which is higher than the deductible limit, Rs.75, 000 will be paid by the super top-up plan bought by Mr. B.

The Verdict

The above instances show that Mr. B had a higher advantage. Super top-up plans are the best solution to increase your coverage amount simply because they aggregate all the claims of a year and then compare it against the deductible threshold. This gives a better sense of security because you are secured against small claims which you might face which will though use-up your health plan, yet they will not trigger the top-up plan. Moreover, super top-up plans are very cheap and increase the coverage at affordable rates. I have compiled some super top-up plans along with their premiums rates assuming a male aged 30 years is buying the plan.

Plan NameSum AssuredDeductiblePremium
L & T Medisure Super Top-up PlanRs.7 lakhsRs.3 lakhsRs.1,511
United India Super Top-up Medicare PlanRs.7 lakhsRs.3 lakhsRs.2,900
Apollo Munich's Optima SuperRs.7 lakhsRs.3 lakhsRs.2,210

The premium rates are miniscule compared to the coverage amount. So, if you are insuring your whole family, a cover of Rs.5 lakhs might not be sufficient. Instead of burning your pockets through additional plans, buy a Super top-up plan which will increase the cover and will be affordable. With the rate of inflation increasing every year, who knows what the treatments costs would be a decade later? It is better to make provisions for such costs by having a higher coverage. Since, Super Top-up plans also address your affordability issues it will only be your tardiness which will make you suffer if you do not invest in a good plan now and not your pocket.

Aniket Thakkar
Written by Aniket Thakkar
He lives off TV shows, movies, junk food, comics and sarcasm. When he is not working as a freelance imaginary friend to other beings like him, he works as VP of Marketing at Coverfox.