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Why is Top-up Health Insurance plan important?

Jagrity Sharma Jagrity Sharma 12 November 2019

Is your existing health insurance policy adequate to meet the rising healthcare expenses? Think again! Read how beneficial top-up plans can be for your financial health.

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Medical expenditure is rising at a rapid rate. There are times when healthcare costs have increased more than the overall inflation. Lifestyle diseases, lack of physical exercise, inadequate sleep, rising stress levels, etc. are major reasons for this rise. As lifestyle diseases are increasing, more and more people are getting hospitalised at frequent intervals. Therefore, it is absolutely necessary to have a comprehensive health insurance plan to defeat the ever-rising healthcare expenses.

Earlier, a family health insurance policy worth Rs. 3 lakhs was considered to be sufficient for a family of four members. Now, it is considered insufficient. Increased health insurance cover can be an additional burden on your finances, and not everyone can bear it.

That is why having a top-up health insurance plan is important.

What is a top-up cover?

A top-up cover is an add-on health insurance cover that offers you coverage over and above your original health insurance plan. For example, you have a health insurance cover of Rs. 4 lakhs. Now, to get additional coverage, you can buy a top-up cover offered by the same or any other health insurance company. You can buy an additional top-up cover of Rs. 3 lakhs and your deductibles are Rs. 4 lakhs. Hence, in case you are hospitalised, and your treatment cost is Rs. 5 lakhs, the expenses of Rs. 4 lakhs would be paid by your base health plan and the remaining amount of Rs. 1 lakh would be paid from your top-up health cover.

Before going further, you should know what is deductible. A top-up health cover comes with a specific cut-off amount which is called “Deductible”. This means that the top-up cover won’t offer coverage up to this specific amount.

Why do you need a top-up health insurance cover?

You may be an employee of an organised business sector where your health insurance needs are taken care of by a health plan provided by your employer. This plan may extend the coverage for your family as well. However, have you ever thought what if you resign from this job or what after your retirement? It is important to note that health insurance provided by an employer lasts until you are associated with the organisation. When you resign from the service, the insurance coverage also ceases to exist. In such a case, you are not adequately insured, and in case of a medical emergency, a hefty bill will have to be paid from your pocket. Moreover, even if you are covered by a health plan, there is no guarantee that the sum insured would be adequate to cover all your medical bills. Hence, a top-up health insurance cover is the perfect way to be prepared for every medical emergency.

A top-up cover for your existing health insurance plan gives you an additional cover which helps you when your existing health plan falls short or your sum insured is not adequate to cover your medical bills. Here are a few benefits of a top-up health insurance policy:

  • A top-up plan is cheaper than buying an additional health plan to increase your sum insured.
  • It gives you an option to choose your deductible limit.
  • A top-up plan is easy to buy. You can buy a top-up plan from your existing health insurance company or you can also buy it from other health insurers without any restrictions or hassle.
  • A top-up plan can be attached to your family floater or individual health plan.
  • You are eligible to receive tax benefits under Section 80D of the Income Tax Act, 1961.

Some facts you should know about top-up health insurance policy

Buying top-up policy: You can buy a top-up plan from your existing health insurer, or you can also buy the same from a different one. Top-up plans are bought as an add-on cover with the basic health insurance policy. You can also buy it online by just providing a few basic details.

Eligibility: The minimum age to avail a health insurance top-up plan is 18 years. The maximum age is generally 80 years. The age limit may differ from one insurance company to another.

Deductible in a top-up plan: You will have to choose a deductible while buying a top-up plan. In the case of an insurance claim, a certain amount will have to be paid by you as deductible, and the insurance company will pay the rest of the amount. Higher the deductible amount, lower will be the premium towards your top-up plan. However, you should not pick any random amount as deductible.

The deductible amount should be the amount that you can pay in case any medical emergency arises.

Premium and sum insured: The premium amount of your top-up plan depends on the chosen sum insured, age of the insured and deductible. Higher the deductible, lower the premium and vice versa.

Pre-medical test: No medical examination is required up to the age of 45 years. However, this may vary from one insurance company to another. Those who are above 45 years are required to go through a medical examination to avail a top-up health plan.

It is not a rider: Make sure that you do not confuse a top-up plan with riders such as critical illness, hospital cash and personal accident insurance. A top-up plan is nothing but an indemnity cover which gives you the same features as your regular health insurance policy.

Top-up health insurance plans are considered the most suitable supplementary coverage option that come with dual benefit of higher sum assured and lower premium. Moreover, it is a blessing for senior citizens, when the chances of falling sick are higher, and the healthcare expenses are bound to rise. Even if you are covered by your employer's health plan, you can consider availing a separate top-up policy to enhance the basic cover. A top-up health insurance plan is the perfect match for anyone who is seeking a higher sum insured at affordable premiums.

Recommeded Link:What are the Additional Benefits of Super Top Up Health Insurance?

Jagrity Sharma
Written by Jagrity Sharma
A bibliophile who hates alliterations, but loves cream, comics and content immensely! On another note, a content marketer who leverages the power of words to explain...almost anything!