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If you're looking for an additional cover at low premium over and above an existing health plan, top-up health insurance plans can be explored.

The Covid-19 crisis was indeed a wake-up call for those immune to the rising cost of medical treatment in India. The hospital bills and subsequent claims of insurance are a testament to the common man’s financial struggle to fight the economic battle amid the unprecedented health crisis. Having seen the aftermath of the pandemic, it’s obvious for someone to contemplate whether they have enough health insurance to tackle the ill effects of a sudden health emergency. Many of you might want to increase your health cover after evaluating the current treatment cost across hospitals. One of the ways to do so is via a top-up or a super top-up health plan.

Top-up plan

If you’re looking for an additional cover at low premium over and above an existing health plan, top-up health insurance plans can be explored. Such plans provide financial security in case the basic threshold limit under the regular policy gets saturated. But here’s the catch. The cost of a top-up plan is linked to the deductible limit. This limit is pre-decided and mentioned in the policy document. Only if the cost of a single illness crosses the deductible limit, the top-up plan kicks in.

Consider this: Mr X has a health insurance policy of Rs 5 lakh and pays an annual premium of Rs 12,000 towards the policy. Due to a brain stroke, Mr X is hospitalised for 15 days and the treatment cost reaches Rs 8 lakh. Ideally, his policy would pay Rs 5 lakh while he pays the additional amount from his own pocket. But, if Mr x had opted for a top-up policy of, say, Rs 10 lakh with a deductible limit of Rs 5 lakh, the extra amount (Rs 3 lakh) could be paid by via the new policy. It will ensure the insured remains financially secure irrespective of the hospital bill crossing the sum assured.

Super top-up plan

Having said that, a top-up plan will be effective only if the threshold limit on a regular policy is exceeded on a single hospitalisation. On the other hand, a super top-up offers provision for multiple claims. A super top plan comes to one’s aid when a single claim doesn’t outlive the threshold limit of the insurance cover but multiple claims do.

For instance, if Mr X had both the super top-up plan and regular top-up plan with a maximum sum insured of Rs 10 lakh (assuming a deductible of Rs 5 lakh). Suppose there was more than one claim arising in a year, the first one of Rs 2.5 lakh and the second one of Rs 3.5 lakh. The basic top-up plan will not help settle either of the claims. This is because the bill must exceed the deductible (Rs 5 lakh) in a single hospitalisation to avail top-up. However, in the case of super top-up plan, the sum total of all the claims will be considered. Thus, Rs 6 lakh (2.5 lakh + 3.5) – Rs 5 lakh deductible, i.e., Rs 1 lakh will be paid out to the insured.

Put simply, a super topup policy puts together all the hospitalisation claims to calculate the deductible limit while top-up calculates it basis a single illness during a single hospitalisation. Remember that higher the deductible, cheaper the top up plan.

Key terms

Deductible: It is the base amount over which a top-up or super top-up policy is enforced. For example, for a regular policy of Rs 5 lakh, the top-up is bought for Rs 10 lakh with the deductible at Rs 5 lakh.

Lower premium: The premium for a top-up health insurance policy depends on the deductible. A higher deductible results in a lower premium and vice-versa.

Top-up vs super top-up

While top-up works on the principle of ‘per claim’ or ‘per hospitalisation’, multiple claims are allowed for super top up plans. While the former lapses after a single claim for the cover provided, the latter would lapse only when the entire cover is exhausted.

Some of the popular top-up and super top-up health insurance policies include the likes of Bajaj Allianz Extra Care, ICICI LOmbard Healthcare Plus, Star Health Super Surplus and HDFC Health Suraksha Top-up Plus among others.