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Increase Your Health Insurance Coverage With Top Ups

By Vikas Chandra Das
21 July 2022, 11:46 AM
health insurance coverage with top ups

A Health Insurance plan is a type of insurance plan which pays for your hospitalisation expenses during the policy tenure. With the increased medical costs in today’s times, having optimal coverage is essential to meet the increased medical expenses. Having a health insurance plan with the low sum insured might not cover the medical costs completely and incur out-of-pocket expenses. On the other hand, buying a health insurance plan with a higher sum insured might not be affordable at all times. So, how can a high sum insured be made affordable?

One of the easiest ways to increase your health insurance coverage is through a top-up plan or a super top-up plan. 

What are Top-up Plans?

A top-up plan is an additional coverage at a lower cost. It can be added to your health insurance plan to enjoy higher coverage without pinching your pocket. It is a regular health plan offered by most health insurance companies. It covers the cost of hospitalisation only after the deductible limit of the plan is exhausted. It means that the top-up plan activates only if the claim exceeds the chosen deductible limit. 

How Top-up Plans Work?

You choose a sum insured and a deductible when buying a top-up plan. The claim would be paid when the amount of your insurance claim exceeds the specified deductible limit. The higher the deductible limit in the top-up plan, the cheaper the plan will be. 

Example- If you already have a health insurance plan of the sum insured INR 4 Lakh and want to increase its coverage then you can buy a top-up plan of sum insured INR 5 Lakh with a deductible limit of INR 4 Lakhs. On doing so, you will get the benefit of a total sum insured INR 9 Lakhs. 

Now, in case of claims up to INR 4 Lakhs, your existing health plan would cover the medical costs. Thereafter, any amount in excess of INR 4 Lakh will be paid from the top-up plan. 

Suppose, your health insurance claim comes to INR 7 Lakhs then you can claim INR 4 Lakhs from the original health insurance plan and the remaining INR 3 Lakhs from the top-up health insurance plan.

Top-up plans work very much like health insurance plans as both might not cover pre-existing diseases or illnesses in the initial few years and have a specified waiting period. The waiting period of top-up plans are independent of the base health insurance plan. Even if you have waited out the waiting period of the health insurance plan, you will also have to wait for the waiting period of the top-up plan before you start to enjoy its benefits. 

Tip: Thus, it is advisable to invest in a top-up plan at the earliest so that the plan can cover your pre-existing illnesses once the waiting period is over.

Benefits of Top-up Plans

Top-up plans are pocket-friendly and offer higher coverage at low premiums which makes them a smart choice. Let’s discuss some of its benefits- 

  1. Benefit of supplementing an existing coverage 
    Top-up plans offer the benefit of supplementing your health insurance coverage by paying a low amount of premium thereby making it popular among customers. Hence, if you already have a health insurance plan and you want to increase its coverage without increasing the premium burden, a top-up plan is the best option. If you do so, claims in excess of your base health plan will be met by the top-up plan and you would get to enjoy a higher cover.
  2. Lower premiums-
    These plans are easily affordable as they have low premiums. The reason for low premiums is the applicability of the deductible limit beyond which the plans pay a claim.
  3. Benefit of buying it as a floater plan
    Top-up plans can be bought as both individual and family health plans which not only provide coverage to you but also to your spouse, children and dependent parents.
  4. Flexibility
    Top-up plans also provide you the option to increase or enhance your coverage at the time of renewals. You also get the option to add new members to the plan’s coverage making the policy flexible

Another alternative to increase the health cover is a super top-up plan. Let’s see how a super top plan works and understand its benefits. 

Super Top-up Health Plans

Besides top-up plans, super top-up plans are also available to help increase your coverage without hurting your pockets. Let’s understand what they are - 

What are Super Top-up Plans?

Super Top-up plans, like top-up plans, provide additional coverage, typically over your basic hospitalisation policy. These plans also have a sum insured and a deductible limit and claims are paid when they exceed the deductible limit. However, while in top-up plans each claim is measured against the deductible, under super top-up plans, aggregate claims made in a policy year are measured against the deductible. If the aggregate claims exceed the deductible, the claim is paid.

How Super Top-up plans Work?

As mentioned earlier, super top-up plans aggregate the total claims in a year and then measure them against the deductible. Let’s understand with an example.

Example- Suppose you buy a super top-up plan with a sum insured of INR 10 lakhs and a deductible of INR 5 lakhs. Now, if there is a claim of INR 3 lakhs, it would be lower than the deductible and would not be paid. 
If, however, in the same year, you make another claim of INR 3 Lakhs, the aggregate claims amount to INR 6 lakhs. In such a case, the claim of the additional amount of INR 1 Lakh, which exceeds the deductible, will be paid by the super top-up plan. Any third claim in the same year will also be entertained by the super top-up plan until the sum insured of INR 10 lakhs is exhausted.  

So, while a top-up plan would not have paid the second claim of INR 3 lakhs (as it considers a deductible in EACH and EVERY claim and not aggregate it in a single policy year), a Super Top-Up Plan would since the total claim exceeds the deductible limit.

This is the BASIC difference between a Top-up Plan and a Super Top-Up Plan. 
A top-up plan considers the Deductible for every claim while a Super Top Up plan considers the total amount of claim in one policy year and then pays the amount more than the deductible! 

Benefit of Super Top-up Plans

Super top-up plans offer several benefits to its customers. Read them as under-  

  1. Additional Benefit- 
    A Super Top Up Plan supplements your standard health insurance policy by offering an additional sum insured
  2. Cost Effective- 
    Super Top-up plans are cost effective as the amount of the premium of super top-up plan is low compared to a normal indemnity policy without a deductible but is usually more expensive than Top Up plans
  3. Higher probability of claim payment- 
    A super top-up plan aggregates the claims made to match them against the deductible limit. This increases the probability of claim settlement even when you make multiple small claims in a policy year

Which One to Choose- Top-up Plan or Super Top-up Plan?

Both top-up plans and super top-up plans are designed to enhance the coverage of an existing health insurance plan without being too costly. Selecting one should be based on your requirements. Super top-up plans score over top-up plans because of the aggregation of claims and can be considered for increasing your health insurance coverage, especially if all the family members are covered under a single policy.

Nowadays, medical diseases and illness have become very common and the treatment and hospitalisation costs lead to outflow of huge financial resources. If the sum insured of your health insurance plan is low then your out-of-pocket expenses will be high which will defeat the whole purpose of buying a health insurance plan. You should, therefore, enhance your coverage with a top-up or a super top-up plan as soon as possible. 

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