What are the Top Up Health Insurance plans and their benefits? Top up health insurance plans provide the higher insurance coverage with lower marginal cost. They can enhance your existing health insurance coverage with affordable premiums.
Many of us ignore buying health insurance (Mediclaim), we think if we are getting Mediclaim cover from the employer then why should I go with health insurance policy?
I wanted to ask all of them, are we getting sufficient health insurance coverage for the family in employer health insurance (Group Mediclaim) policy.
Imagine if your hospital bill comes more than your sum assured limit, then you have to pay the extra amount from your own pocket, which can disturb your financial savings or the deposited amount that you are probably accumulating for the study of your child.
You may take comfort by believing that being in the organized sector your medical needs will be taken care of by the employers but have you ever wondered what will be the scenario if the coverage offered is not able to meet all your medical costs? Your present cover may be sufficient to pay for small illnesses, but there is always a chance it would fall short in case of a bigger medical emergency. And not to forget that the employer’s health cover ceases to exist once you leave or retire.
In my experience, the average medical cover opted (Personal health insurance) or provided by an employer (Group Mediclaim) is generally in the range of Rs 3 Lakh to Rs 5 Lakh
But, we are also aware premiums for the medical insurance increasing every year. For some of us, it is not possible or afford to pay higher premiums for higher sum assured, or it is also not practicable to buy a new Health insurance policy to enhance the health insurance coverage.
So, what are the options available to enhance the Health insurance coverage without paying huge premiums?
We can opt in for Top up health insurance plans and super top up health insurance policy for this need
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.
Both TOP UP HEALTH INSURANCE Plans and SUPER TOP UP HEALTH INSURANCE Plans are used to maintain to enhance the Health coverage for your existing insurance policy with low premiums
There is a very BIG difference in these two and the difference is pretty crucial, so it is best to understand how they work.
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.
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 lakh 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 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 lakh.
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 lakh.
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 lakh. 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)
Popular Top-up and Super Top-up Health Insurance Policies in India:
Some of the popular top-up and super top-up health insurance policies in India are mentioned below.
- Bajaj Allianz Extra Care– This policy offers cover ranging from Rs 10 lakh to Rs 15 lakh with deductibles ranging between Rs 3 lakh and 5 lakhs. Working on a per claim basis, it comes with a family floater option.
- ICICI Lombard Healthcare Plus– This policy offers flexible sum assured and deductibles to suit the financial requirements of different individuals, covering multiple scenarios.
- Star Health Super Surplus– This plan comes with a cover ranging between Rs 7 lakh and Rs 10 lakh, with the deductible starting at Rs 3 lakhs.
- Religare Enhance– This custom designed scheme comes without any sub-limits, ensuring that the entire family is protected, with the option to choose a cover between Rs 1 lakh and Rs 30 lakh, depending on their requirement.
- Apollo Munich Optima Plus– This plan covers multiple scenarios, offering cashless benefits and an option to convert the scheme into a zero-deduction health insurance policy upon retirement.
- United India Insurance Super Top Up– This plan can be used to protect both an individual and his/her family, coming with a floater option and offering cashless treatment across multiple locations in India.
- HDFC Health Suraksha Top-up Plus– This plan comes with a family floater option, with deductible starting from Rs 1 lakh and sum assured ranging between Rs 2 lakh and Rs 10 lakh.
GST rate of 18% applicable for all financial services effective July 1, 2017.
Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.(Reference: -Bankbazaar)