Top-up Health Insurance

What are Top-up Health Insurance Plans?

A top-up health insurance plan is an indemnity policy that provides additional medical coverage to people with an existing health insurance policy or an employer mediclaim policy. It allows people to get their medical expenses covered even if they have exhausted the sum insured of their regular health insurance policy. However, a top-up plan comes with a mandatory deductible or threshold limit and provides coverage only after the insured has paid the deductible amount.

Top-up medical insurance plans are affordable and more economical than basic health insurance. They can also be taken along with the health coverage provided by your employer. It will offer an additional sum insured to help you cope with unforeseen medical emergencies in case you feel that your existing medical policy may not suffice.

How Does Top-up Health Insurance Work?

A top-up health insurance plan gets activated only when the sum insured of your regular health policy gets exhausted. The plan comes with a deductible amount, which is opted by the policyholder at the time of buying the policy. Only when you pay the deductible amount, you can claim your top-up insurance plan. 

You can pay the deductible amount from your own pocket or through another health policy. However, you need to cross your deductible limit in a single hospitalization bill. Moreover, you can claim your top-up insurance plan only once in a policy year.

Let’s understand the concept of top-up health insurance with the help of the following example.

Suppose you have a health policy with a sum insured of Rs 5 lakh and you decide to buy a top-up insurance plan of Rs 10 lakh with a deductible of Rs 2 lakh. Now imagine you got hospitalized for an illness and a hospital bill of Rs 7 lakh was generated. In this case, the sum insured of your base policy i.e. Rs 5 lakh will get exhausted. Moroever, you can claim your top-up plan as your base policy sum insured will take care of your deductible amount. 

So if you have registered a claim of Rs 7 lakh, then Rs 5 lakh will be paid from your base health policy and the remaining Rs 2 lakh will be paid from your top-up plan. 

List of Top-up Health Insurance Plans in India

Take a look at the top-up insurance plans available in India:

*Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in.

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Benefits of Buying a Top-up Health Insurance Plan

Here are some of the reasons why you must buy a top-up health insurance plan:

• Get Enhanced Coverage – Top-up plan helps you to enhance your medical coverage so that you can pay for unforeseen medical expenses even after the sum insured of your base policy gets exhausted.
• Lower Premiums – As compared to regular health insurance plans, top-up insurance plans are available for lower premiums as the deductible amount lowers the liability of the insurer.
• No Restrictions or Sub-limits – Most plans do not have any restrictions or sub-limits on hospitalization expenses, like room rent, doctor fees etc.
• Easily Convertible – A top-up insurance plan is very flexible as you can easily convert it to a regular health plan at the time of renewal.
• No Pre-policy Screening Required – Most top-up plans do not need the insured to undergo any medical check-ups before buying the policy up to a certain age.
• Tax Benefits - Tax benefits can be claimed on the insurance premium paid to buy the top-up plan under Section 80D of the Income Tax Act.
• Peace of Mind - Even if your current health policy gets exhausted while filing a claim, you can still enjoy peace of mind as your top-up plan will cover your remaining bills.

What is Covered in a Top-up Health Insurance Plan?

The following medical expenses are covered under most top-up insurance plans:

• In-patient hospitalization expenses, including nursing and boarding charges, room rent, doctors’ fees, OT charges, cost of oxygen, prosthetic devices or implantation of any other equipment during surgery, blood, diagnostic procedures, and other similar expenses
• Pre-hospitalization expenses
• Post-hospitalization expenses
• Day care procedures that do not require hospitalization of even 24 hours
• Organ donor expenses
• Emergency ambulance charges
• Domiciliary treatment expenses

How is Top-Up Insurance Different from a Basic Health Insurance Plan?

Top-up health insurance plans cover almost all hospitalization expenses. It is like an indemnity plan, which provides the same benefits as a basic reimbursement health plan. The only difference is the cost of deductibles that make these plans easy on the pocket. Moreover, most top-up plans do not require pre-medical screening up to the age of 50 years, which is mandatory after 45 years under most basic health insurance plans. 

If your basic health plan reaches the sum insured limit, the claim for both top-up and individual health plans can be filed together. Besides, you can easily file a claim under both plans simultaneously from different insurance providers, who will be liable to pay off part of their claims.

But do not mix a top-up plan with a rider benefit. Rider benefits, like personal accident cover, hospital cash allowance, critical illness cover, etc., offer coverage for only a few major illnesses. You can purchase a rider plan only with a base plan. However, you can buy a top-up plan irrespective of having a base plan.

How Top-up Insurance is Different from Super Top-up Insurance?

Top-up insurance and super top-up insurance plans are similar but not the same. Although they both offer additional medical coverage in case your base policy sum insured gets exhausted, super top-up insurance comes with some additional benefits.

While top-up insurance allows you to file only one claim in a policy year after the deductible amount is paid, a super top-up insurance plan accepts multiple claims in a policy year. Moreover, you need to cross the deductible limit of your top-up insurance plan in a single hospitalization bill. However, the super top-up insurance plan allows you to club multiple hospitalization bills to cross the deductible limit.

For example: 

Suppose your top-up insurance plan has a deductible/threshold limit of Rs 3 lakh. If you make two claims in a year of Rs 1 lakh and Rs 2 lakh, then your top-up plan will not be triggered. Similarly, if two members of a family floater plan are hospitalized and the hospital bill comes out to be Rs 2 lakh each, then the top-up policy will not get activated. 

However, if a hospital bill comes for Rs 5 lakh, then the deductible limit will be crossed in a single hospitalization bill and the top-up plan will be triggered.

How to Select a Top-Up Health Insurance Plan?

Keep the following points in mind while selecting a top-up health insurance plan:

• Opt for higher deductibles if you are looking for an affordable plan. 
• Don’t buy an expensive plan to cover exclusions, like daily cash allowance and dental cover as they may be covered by your regular health insurance policy.
• Do not forget to check the waiting period for pre-existing health conditions, named illnesses, maternity cover, critical illness cover, etc.
• Do check if the plan also offers coverage to your family members, including parents, spouse, and children.

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