A Complete Guide to Top-Up Health Insurance Plans!

Published On 12 Feb 2020 By Gunjan Anand

Everything You Should Know About Top-Up Health Insurance!

While facing any trouble, what you fear the most? Isn’t it a shortage of resources? Falling short of money, people, or resource is a nightmare during a medical emergency or any other event. Therefore, holding an additional source of assistance is always preferred. Hence, the provision of a top-up plan is being introduced by almost every insurer to help customers to cater to a medical crisis.

What is a top-up plan?
The Top-up Health Insurance Policy is an additional cover to your existing health insurance plan. It offers you the coverage only after the exhaustion of your basic coverage limit, i.e., your medical expenditure surpasses your sum insured amount. These plans come with different deductibles or threshold limits. 

You can choose the deductible limit while purchasing it as per your medical need and regular plan‘s limit. The higher the deductible or threshold limit will be, the cheaper the top-up plan will be. Health insurance companies like Bajaj Allianz, HDFC ERGO, Religare and many more, have extended their support to offer this scheme to policyholders. 

The top-up health insurance plans bring a much-needed relief during a medical contingency. They are quite popular among the policyholders due to their coverage, features, and benefits. Let’s have a glance at some of these factors of the top-up plans. 

Features of Top-Up Health Insurance Plan

  • Conversion to a basic health plan is easily possible
  • Children can be included too if their parents are already covered
  • No sub-limits or restrictions are applicable to medical costs
  • A family discount is offered in some top-up policies
  • Cumulative bonus is given on the sum insured for every claim free year
  • Free look period of 15 days is offered from the date of buying the policy 
  • The plan can be issued for a duration of 1 year to 2 years
  • No pre-medical examination is required up to a specified age
  • Lifelong renewability feature is available under the plan
  • Tax Benefit is provided as per the Income Tax Act

Coverage of Top-Up Health Insurance Plan

  • The cost incurred on in-patient hospitalization
  • Pre and post hospitalization expenses of 60 and 90 days respectively
  • Daycare procedures that don’t require any admission
  • Some plan also offers coverage for the organ donation cost
  • Domiciliary treatment expenses as recommended by the doctor
  • Emergency ambulance costs are covered up to a certain limit
  • Cumulative bonus expenses are covered during the renewal in some plans

Benefits of Top-Up Health Insurance Plan

  • A monetary backup is created, even if your existing health policy gets exhausted 
  • An alternative to upgrading your current plan coverage during its renewal
  • The Top-Up Plan can be purchased even if you don’t have a basic medical policy

Although, a top-up health insurance policy provides the coverage for almost all the hospitalization expenses, but shouldn’t be mixed with rider coverage, which gives coverage only for some ailments such as critical illness expense, hospital cash benefit, and personal accident cover. 

A rider plan can be bought only with a base health plan, whereas, a top-up plan can be purchased regardless of any base policy plan. In easy words, the top-up insurance functions similarly as an indemnity plan by providing with almost the same benefits as available under a common health insurance plan.

When the top-up plan can be used?

The top-up health insurance policy comes into action when medical expense exceeds the limit of the deductible.

To understand this concept, suppose you own a health insurance plan with coverage of Rs. 3 Lakh. However, you know that as the health care expenses are soaring, your coverage might fall short during a medical emergency and looking forward to increasing it by another Rs 3 Lakh. 

Now either you can purchase a separate plan or ask your insurance provider to upgrade your policy by Rs. 3 Lakh. Both of these are expensive options. But, buying a top-up plan of Rs 3 Lakh, on the other hand, will be economical. Hence, a top-up plan makes is an ideal option. Now coming to its functioning, it will kick in only after your hospitalization cost exceeds the deductible amount that is Rs. 3 Lakh. 

You may also like to read: How Top-up Health Insurance Plans Help You Increase Sum Insured On a Budget

How to choose a top-up health plan?

If you want to buy an affordable plan, opt for a policy with a higher deductible. Also, ensure no duplication of benefits is there while purchasing extra coverage. Dental allowance, daily cash option, etc., is present in regular health plans too, hence, don’t emphasis much on their presence. Do check the waiting period for pre-existing health conditions, pre and post hospitalization cost coverage, maternity benefit, and so on. It is also advisable to confirm the number of relationships covered under the top-up plan before buying. 

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Conclusion

A top-up health insurance plan is very helpful in bridging the gap between your health coverage and actual hospitalization cost. But, investing in a top-up plan requires a basic understanding of its usage and functions, otherwise, an abortive investment could trouble you later. We hope this article will answer all your questions related to top-up policies and make you find the best possible plan for you and your family. 

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