Difference Between Top-up and Super Top-up Health Plans

What is Top-up Health Insurance?

Top-up health insurance is an addition to the basic mediclaim policy that comes into play when the limit of your existing health plan is exhausted. This means that if you have a regular health insurance policy with a certain coverage limit and your medical expenses go beyond that limit, the top-up plan kicks in to cover the extra costs. However, it works based on a "deductible," which means you first pay a certain amount, and then the top-up policy covers anything above that.

For example, if you have a deductible of ₹3 lakh and a hospital bill of ₹5 lakh, your top-up insurance will cover the ₹2 lakh beyond the ₹3 lakh that you have already paid through your base policy or out of pocket.

Advantages of Buying Top-up Health Insurance

Check out some of the advantages of investing in top-up health plans:

• Cost-Effective: Top-up plans are generally cheaper than increasing the sum insured of a base health insurance policy. They offer high coverage at a lower premium.
• Increased Coverage: These plans allow you to extend your health insurance coverage without altering your existing policy, providing financial protection against large medical expenses.
• Customisable Deductibles: You can choose the deductible limit according to your existing mediclaim insurance coverage and budget, making it a flexible option.
• Tax Benefits: Premiums paid for top-up health insurance plans qualify for tax deductions under Section 80D of the Income Tax Act, 1961.
• Suitable for Senior Citizens: Top-up plans are a good option for senior citizens who may find standalone policies expensive but still need additional coverage.

What is Super Top-up Health Insurance?

Super top-up health insurance goes a step further than top-up mediclaim plans. Instead of considering a single claim, it calculates the total medical expenses over a year. And, once the combined medical expenses exceed the deductible limit, the super top-up plan starts covering costs. This is especially useful if you have multiple small claims within the same year and they surpass the deductible limit when added up.

For example, if you have a deductible of ₹3 lakh, and you face two hospitalisations in the same year, one costing ₹2 lakh, and the other ₹3 lakh. A top-up plan will not help because neither claim exceeds ₹3 lakh individually. But a super top-up plan will come into play because the total expenses,i.e. ₹5 lakh, cross the deductible limit.

Advantages of Buying Super Top-up Health Insurance

Here are the advantages of buying super top-up health plans:

• Cumulative Coverage: Unlike regular top-up plans, which consider each hospitalisation separately, super top-up plans aggregate medical expenses incurred during a policy year, making them particularly useful for individuals with multiple hospitalisations in a year.
• High Sum Insured at Lower Cost: Super top-up plans offer higher coverage limits at affordable premiums compared to standalone medical insurance policies.
• Covers Multiple Hospitalisations: Since the deductible under super top-up plans is cumulative, all hospitalisation bills in a policy year are counted. Once the combined expenses exceed the threshold limit, the super top-up plan gets activated.
• No Need to Modify Base Policy: A super top-up plan enhances your coverage without the need to alter or upgrade your existing base health insurance policy.
• Tax Benefits: The payments made towards super top-up plan premiums qualify for tax deductions u/s 80D of the Income Tax Act.

Difference Between Top-up and Super Top-up Health Insurance

The mediclaim benefits provided under the super top-up plans are similar to top-up plans. Both these plans provide higher insurance coverage while keeping the premium amount low. The major difference is that a super top-up plan offers coverage for complete hospitalisation bills beyond the threshold limit. On the other hand, a top-up policy only covers a single hospitalisation claim above the threshold limit (i.e. the deductible amount).

To know the difference between top-up and super top-up better, have a look at the table below:

In the above table, both top-up and super top-up plans had a sum insured of ₹10 lakh. The deductible chosen is ₹2 lakh. The amount claimed was ₹5 lakh. And under both the plans, the insurance company paid ₹3 lakh to the policyholder.

Later, the second health insurance claim of ₹6 lakh was filed. In that case, anyone with a top-up health plan had to pay the deductible amount of ₹2 lakh and the remaining ₹4 lakh was paid by the insurer. In contrast, super top-up health insurance holders had to pay nothing and the complete claim amount i.e. ₹6 lakh was paid by the medical insurance company.

This is where a super top-up plan has a slight edge over a top-up health plan.

What is a Deductible in Top-up/Super Top-up Plans?

Deductibles refer to the threshold limit set by the health insurance companies. It acts as a safety net for insurers and prevents people from filing frequent and trivial medical claims.

The deductible amount needs to be borne by the policyholders and is not covered by health insurance providers. The insurer only pays the amount over and above the deductibles. This implies that the excess amount is paid by the insurer up to the sum insured limit. Notably, the deductible amount can vary from insurer to insurer and plan to plan.

Here is an example to make it clear for you!

Let's say your base health insurance policy offers a sum insured of ₹10 lakh and you buy a super top-up plan of ₹5 lakh on top of the base amount. And the deductible is ₹2 lakh, then the insurance company will pay the bills exceeding ₹2 lakh and up to ₹10 lakh.

Selecting the Best Option: Top-up Vs Super Top-up

According to experts, to cover the risk of chronic ailments requiring more than one hospitalisation in a year, a super top-up plan should be your choice. Also, the cost of the premium is low in comparison to buying a separate health plan with a higher coverage amount. Moreover, it is suitable for individuals who tend to undergo medical procedures frequently. But the final choice depends upon your requirements and budget.