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How Top-up Health Insurance Plans Help You Increase Sum Insured On a Budget

Updated On Feb 12, 2021

Having health insurance with a low sum insured may fail to meet the medical expenses. This is where a top-up health insurance comes to the rescue. With today’s expensive treatment costs, a top-up plan is playing a pivotal role. You should buy it to keep healthcare costs at bay.

Here's a checklist to understand top-up plans and how it helps you in an emergency.

What is a Top-up Plan?

A top-up plan is a regular health insurance plan offered by most of health insurance companies. It covers hospitalisation costs, but only after a threshold limit (deductible) gets exhausted. In other words, a top-up plan gets activated once the sum insured of the existing health insurance plan has exhausted.  

To understand the top-up plan more clearly, you need to understand the ‘deductible’ or ‘threshold limit’.

A deductible is the part of the claim amount which is not covered by your insurance company. You need to pay the deductible amount before the insurance company becomes liable to pay.

If the deductible amount is Rs. 30,000, the insurer can be liable to pay only when the claim amount exceeds Rs. 30,000.

For instance,

If the deductible amount is Rs. 30,000 and your claim is for say, Rs. 40,000, then the insurer will pay only Rs. 10,000. But in case the claim is for Rs. 20,000, then the insurer is not liable to pay any amount.

Top-up Health Insurance Plans in India

Several top-up health insurance plans are available in India. Some of the popular products offered by insurance companies are:

Why buy a top-up plan?

A top-up plan entertains you by offering additional benefits along with the basic insurance coverage. It is a cost-effective way to increase your health insurance cover.

You can buy a base policy and a top-up product over that policy. With this, the base health insurance can be used to make a claim until the deductible amount whereas the top-up plan can be used to make any payment over that.

So, it is better to buy a health top-up plan by health insurance companies in India to enjoy extra benefits, rather than taking a new health insurance policy.

Things to consider when buying a top-up plan

When buying a top-up plan, make sure that the sum insured in your basic policy is more than the deductible amount.

Say for instance, you have taken a health policy with a sum insured of Rs. 4 Lakh. While choosing a top-up plan, make sure the deductible remains less than Rs. 4 Lakh. This way, if there is a claim of more than Rs. 4 Lakh, you can use both your base policy and top-up plan for paying medical bills.

Here are a few things to consider before you zero down on a top-up plan.

  • Cost Analysis: Before buying a top-up policy, calculate premiums and compare it with the offered benefits. Also, compare the benefits and premiums of top-up plans with a new health policy. If you feel after the comparison that a top-up plan is feasible, affordable, covering all medical requirements, then buy the top-up plan instead of a new health policy.
  • Lower Premiums: A top-up product under a health insurance policy is available at lower premiums when compared to the premiums of a new health insurance product. However, the premium rate depends on the deductible amount. The higher the deductible amount, the lower the premium. It is advisable to pick the product wisely.

When to Buy a Top-up Plan?

As a policyholder, you can decide to own a top-up plan in given situations:

  • Insufficient coverage: Buying a top-up plan is necessary if the basic health plan doesn’t provide sufficient coverage.
  • To increase coverage: A top-up plan can provide you with much-needed insurance coverage. If you tend to increase the coverage without paying higher premiums, a top-up product can be helpful. Its premiums are comparatively lower than that of a new basic policy offering similar benefits.

In a nutshell, a top-up health insurance plan can help you increase the sum insured in a budget, thereby saving money and time. With this option by your side, you don’t need to waste time searching for a new policy and completing the formalities again.

Also Read

Top 10 Ways to Reduce Your Health Insurance Premium

Top 6 Things to Consider While Buying Health Insurance

If you have any doubt about top-up health insurance plans or you want to buy a top-up plan, call InsuranceDekho at the toll-free number 1800-120-5698. 

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