Top-up Health Insurance Plans
About Health Plans
World is growing, technology is advancing, diseases are growing and also there treatment. Life is an unpredictable journey. It can take sharp, fatal turn at moments, which are capable of leaving one physically, mentally, emotionally and financially bruised.
So are you satisfied with your medical insurance plan? Does it provide proper cover in this era of inflation? If your answer is no then a top-up policy is all that you need to buy.
If you have a car, you would know the risk of driving without a spare tyre. Till 1904, car drivers dreaded punctured tyres. Then a simple idea by Thomas Morris Davies of the UK revolutionized things – he added a spare so that if the tyre got punctured, you had a ready-to-use stand-by.
Top-up health plans have a similar role. They are a stepony to your health reimbursement policy after you exhaust the sum insured limit Extending your threshold limit without making any holes in your pocket. Top up health insurance plans are a unique type of health cover policies that offer you (insured) an additional coverage, which is beyond the “threshold limit” (or) the maximum limit of the existing health insurance policies.
Give A Boost To Your Healthcare!
A regular policy reimburses hospital bills up to the sum insured while a top-up plan covers costs after a certain threshold is reached.
In simple words, when you are hospitalized, the insurer will pay up to the set sum insured limit. The top-up, on the other hand, will kick in only after a certain amount, say, Rs 2 lakh has been crossed. It’ll pay for the claim amount over and above it.
“A top-up health policy is an additional coverage for people who have an existing individual plan or a Mediclaim from the employer. It is for reimbursement of expenditure which arises out of single illness beyond the limit of the existing cover.”
What Is Top-Up Health Insurance Plans ?
Top up plans work on the cost-sharing basis where medical expenses up to deductible limit have to be borne by the policyholder. The insurance company takes a charge if your medical bill crosses the deductible limit then that expenses will be covered by your top-up health insurance plans.
For example: Let’s say you have Group Mediclaim or personal health insurance policy for Rs 5 lakh, and you would have opted for Top Up Health Insurance Plans for 10 Lakh with threshold limit (deductible) of Rs 5 lakh.
If there is a claim for Rs 7 Lakh in the same year, then from your Group Mediclaim or personal health insurance policy you can pay up to 5 Lakh Rs, but remaining 2 Lakh will be covered by Top Up Health Insurance policy.
So, Top Up Health Insurance policy will play an important role when your existing policy sum assured Exhausted, Remaining Medical bills can be settled by Top Up Health Insurance Policy. Otherwise, those Medical Bills can have a Big impact on your Financial Savings Which you might be saving For Other Specific Goals.
How Top Up Health Insurance Plans Works?
We will try to explain the different scenarios for Mediclaim so that you could get clear idea how Top Up Health Insurance Works.
For Example: Let’s say Mr. Gopal has a 5 lakh Mediclaim policy (Group Mediclaim or private health insurance) with 10 lakh Top Up Health Insurance Policy with a threshold limit of 5 lakh (deductible)
Situation 1: – If there is a single claim of 4 lakhs in the policy year, that amount will be paid by your regular policy
Situation 2: – If there is a single claim of 6 Lakh in the policy year, that amount will be paid by your regular policy up to 5 Lakh and will be exhausted, remaining amount 1 Lakh will be compensated by Top Up Health Insurance Policy.
Situation 3: – If there is a claim in a policy year of Rs 10 Lakh then 5 Lakh will be paid by your regular health insurance policy (or Group Mediclaim) and the Remaining amount will be compensated by Top Up Health Insurance Policy.
Situation 4: – If there is a two claim in same Policy Year (claim1) one with the claim amount of Rs 5 Lakh and another claim (claim 2) with the amount of Rs 4 Lakh. So, first Claim can be compensated by your Regular Health Insurance Policy and policy for the year exhausted, but for 2nd claim neither it will be compensated by your regular Policy because that is already exhausted with the first claim nor it will be compensated by Top Up Health Insurance Policy because your Threshold limit, that is 5 Lakh for single claim in policy year, so as per the policy Term and condition that amount you will have to bear if any claim amount not cross the threshold limit.
What Does a Top-Up Health Insurance Plan Offer?
Health insurance top-up plans cover almost all the hospitalization expenses. But do not mix them with a rider benefit. Rider benefits like personal accident cover, hospital cash, critical illness etc. cover 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 the base plan.
Basically, top-up health insurance is like an indemnity plan, which provides the same benefits as a basic reimbursement health insurance plan.
The only difference is the cost of deductibles that make these plans easy-on pocket. Moreover, in a top-up plan, pre-medical screening is not required up to the age of 55 years. And, in most of the other basic health insurance policies, it becomes mandatory after 45 years of age.
If your basic plan reaches the threshold, the claim for both top-up and individual health plan can be filed together. And you can easily both of them simultaneously from different insurance providers, who will be liable to pay off the part of their claims.
What is a Super Top-up Health Insurance Plan?
A Top-up insurance policy has certain drawbacks when it comes to its implementation, which can be resolved by opting for a Super Top-Up policy. Unlike a Top-up plan which pays only if the threshold limit on a regular policy is exceeded on a single hospitalization, a Super Top-up provides cover over the threshold limit in multiple cases.
Let us take the example of Mr. Gopal, he has a Mediclaim policy for Rs 5 Lakh and Super Top Up Health Insurance for Sum assured of Rs 10 lakh with a threshold limit of 5 lakhs.
Unfortunately for Mr. Gopal, he is hospitalized due to a heart attack, the treatment for which goes up to Rs 8 lakh, up to 5 Lakh can be paid by Regular Health Insurance Policy and Remaining 3 Lakh would be paid by Super Top Up Health Insurance Policy.
Post-treatment for his heart attack he suffers another one after 6 months, with the bill coming up to Rs 7 Lakh, (if he would have opted to Top Up health insurance – which comes outside the ambit of his top-up plan since only one claim can be entertained under its provisions). Now, if Mr. Gopal had opted for a Super Top-up plan with a cover of Rs 10 lakh and a threshold of Rs 5 lakh, this plan would pay the additional sum of 2 lakhs.
In simple terms, a Super Top-up Health Insurance policy has provisions for multiple claims, which are not offered by a regular top-up plan.
So, in Situation 4, where Gopal had 2 claims in the same policy year one with the amount of Rs 5 lakh and another claim with the amount of 4 lakhs. So, the first claim can be compensated by his Personal Mediclaim policy or (Group Mediclaim) and another claim which was of Rs 4 lakh would also be paid by Super Top Up Health Insurance Policy.
(While 2nd claim cannot be entertained with Top Up health insurance Policy as we had discussed above)
When It Makes Sense !
Both of these plans have their own benefits. In the long run, a super top-up plan is a cost-saver and offers coverage for wide range of illnesses. It is especially beneficial for senior citizens who have frequent medical expenses that can be covered due to cumulative coverage. However, factors such as your premium outgo, budget and medical history should be considered before opting for either plan.