The value of health is vital for every human on Earth. ‘Health is wealth’ is a world-famous proverb concerning health. Health is the biggest Wealth in Life. There is strong perspective that, unless a person is Healthy, it’s difficult for him/ her to enjoy. Money doesn’t have a value unless it is really enjoyed. Simply the Possessions of money or things don’t make an individual Rich, It’s the Good Health.
Most of us go about our lives without securing our medical expenses in totality. In my experience, the average medical cover opted or provided by an employer is generally in the range of ₹3 Lakhs to ₹5 Lakhs. Do you really think this cover is sufficient? What if the claim amount is more then the cover amount? Can you afford to pay the medical expenses out of your pocket? Do you agree that the medical expenses are increasing at a very fast rate every year?
Also, it is not practically possible for everyone to increase the premium of their existing plan, or buy another Health Insurance policy. Needless to say, there’s a need for higher coverage, and that’s where top-up or super top-up plan comes in.
Top Up Plan and Super Top Up Plan:
A top up plan offers additional coverage to the insured who already have an existing medical insurance plan without the need to buy an additional policy. This plan covers expenditure that may arise out of a single illness; this is over and above the existing base cover.
A super top plan offers medical cover when a single claim does not go beyond the threshold limit of the insurance cover but multiple claims do. A super top plan would consider the total of all hospitalisation bills that are submitted, regardless whether they are for a single illness or multiple ones.
Take an Example of Mr. Z. Mr. Z has basic health insurance of ₹5 Lakhs.
In case Mr. Z buys a top-up plan of ₹ 10 Lakhs with ₹ 5 Lakhs Deductible or he buys a Super top-up plan of ₹ 10 Lakhs with ₹ 5 Lakhs Deductible.
What happens if there is a
- A.Single Claim of ₹14 Lakhs
- 1.Top-up Plan
Basic Health Insurance plan will cover ₹5 lakhs. Top-up plan will cover the remaining ₹9 lakhs as it exceeds deductible.
- 2.Super Top-up Plan
Basic Health Insurance plan will cover ₹5 lakhs. Super Top-up plan will cover the remaining ₹9 lakhs as it exceeds deductible.
- B. Two Claims of ₹4 Lakhs each
- 1. Top-up Plan
Basic Health Insurance will cover for the ₹4 lakhs of first claim and ₹1 lakh of second claim. There will be no claim pay-out from Top-up Plan, as the individual amount of the claim does not exceed ₹5 lakhs.
- 2.Super Top-up Plan
Basic Health Insurance will cover for the ₹4 lakhs of first claim and ₹1 lakh of second claim. Super Top-up will cover the remaining ₹3 lakhs.
- C.Two Claims one claim of ₹8 Lakhs and another claim of ₹4 Lakhs
- 1. Top-up Plan
Basic Health Insurance will pay ₹5 lakh from first claim Top-up Plan will pay the remaining ₹3 lakhs for the first claim. No claim is payable for second claim as it does not exceed the deductible limit.
- 2. Super Top-up Plan
Basic Health Insurance will pay ₹5 lakh from first claim Super Top-up will cover the remaining ₹3 lakhs for the first claim and ₹4 lakhs for the second claim.
When to opt for a Top-up Health Insurance Policy:
Individuals can opt for a top-up or super top-up policy under the following circumstances.
- When their regular health insurance policy doesn’t offer adequate protection. In such cases they can choose one of these plans to enhance their protection.
- When they want to increase their cover without having to pay higher premiums. The premium for a top-up or super top-up plan is cheaper than the premium for a normal plan with the same cover, helping them save money.
How to decide?
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.
- Is it necessary to have a regular health plan? It is not mandatory to have an existing regular or group Mediclaim to buy a top-up or a super top-up plan.
- Is it necessary to buy a top-up plan or a super top-up plan from the same company? No, it is not necessary.
- Why are top-up plan or super top-up plan cheap? The deductible limit makes these plans cheaper when compared to regular plans. Higher the deductible threshold limit, lower the premiums of the top-up or super top-up plan.
- Can I top-up a family floater policy? Yes, top-up and super top-up policies come as individual and floater plans.
- No claim bonus & top-up plans: If you have accumulated no claim bonus (for claim free years), top-up / super top-up plan will pay the claim amount over and above the regular plan’s sum amount plus no claim bonus amount. Top-up plans generally do not offer No Claim Bonus.
- Most of the top-up / super top-up plans work on reimbursement basis. They will pay the claim amount after the insurer gets the details of the medical bills, to access whether the policyholder has paid the deductible limit by himself or through any existing health insurance policy.
- Are there any top-up / super top-up plan for parents / senior citizen? Yes, some companies offer.
- IS there any income tax benefits on top-up / super top-up plan? Yes, the premiums paid on top-up / super top-up plan are eligible for Income deduction under section 80D.
- What are the important things to watch out before buying a top-up / super top-up plan? It is advisable to go through policy wordings of any health insurance plan. Understanding the important points like the duration for pre-existing disease, scope of cover, if day-care procedures are covered, cover for pre-post hospitalisation expenses, etc.