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Top-Up Health Insurance: All You Need to Know

Updated On Dec 09, 2020

If you drive a car, then you must be aware of the difficulties people face when not carrying spare tyres with them. We keep spare tyres with us so if a tyre gets punctured, then we have a ready-to-use stand-by. Top-up health insurance plans play a similar role. They act as a stepney to your regular health insurance plans after you exhaust its sum insured. 

What are top-up health insurance plans? 

Top-up health insurance is an additional coverage provided by health insurers to people who have an existing health insurance plan. A standard health insurance plan covers hospitalisation expenses up to the sum insured limit whereas top-up health insurance covers the cost after a certain threshold is reached, known as deductible in insurance terms. 

For instance, you have a regular plan of sum insured amount of Rs. 5 Lakh and a top-up health insurance with insured of Rs. 4 Lakh. If you then get hospitalised, and make a claim for, let’s say, Rs. 8 Lakh, your basic sum insured of Rs. 5 Lakh will then be used and the rest Rs. 3 Lakh will be used from the top-up plan.

To help you extend this threshold, many health insurance companies offer top-up health insurance plans including HDFC Ergo and Bajaj Allianz

The premium for top-up health insurance plans is lesser compared to regular plans. One can purchase a top-up plan along with coverage offered by their employers. Many people confuse top-up plans with health insurance riders. But they are not the same. Top-up plans can be considered as only indemnity schemes with regular cover.  

One can always opt for top-up health insurance for additional coverage if the coverage offered under the regular plan seems insufficient. 

Benefits of top-up health insurance plans   

  • Top-up health insurance plans are synonymous to peace. Even if you fully exhaust the sum insured of your standard health insurance plan, there is no need to worry with a top-up plan.  

  • You can always choose to increase your existing health insurance coverage with top-up health insurance plan at the time of renewal of your existing policy.

  • Even if you don’t have not purchased a regular plan, you can still buy a top-up health insurance policy.

However, it is preferred to buy health insurance plan that has sum insured amount same as the deductibles. 

Some common features of top-up health insurance plans

  • Can be converted into a regular plan easily

  • Children can so be included if both the parents are covered under the same plan

  • Any kind of sub-limit, be it on room rent, medical practitioner’s fee, doctor’s fee etc. is not applicable in top-up health insurance plans 

  • Insurers also offer discounts on many top-up health insurance plans if purchased on a family floater basis which includes the Proposer, Spouse, Dependent children, and dependent parents up to a certain limit 

  • The policyholders enjoy No Claim Bonus for every year claim is not made up to a specific limit 

  • Free look period of 15 days is provided to the policyholders within which they can understand the terms and conditions of the top-up plan purchased

  • Policy tenure of 1 year or 2 years as per policyholder’s choice

  • No requirement of pre-medical screening up to a specific age

  • Lifelong renewability benefit is provided

  • Tax benefits under Section 80D of the Income Tax Act

Common coverage benefits offered under top-up health insurance plans 

Different insurers vary with the type of coverage they offer to their respective policyholders. However, some of the common coverage benefits are listed below:

  • Cover for in-patient hospitalisation expenses. This includes nursing and boarding charges, room rent, expenses of oxygen, blood etc., doctor’s fee, prosthetic devices or other similar expenses

  • Pre hospitalisation expenses for up to 60 days after hospitalisation

  • Post hospitalisation expenses for up to 90 days after hospitalisation

  • Cover for day care expenses. These are treatments that require hospitalisation of not more than 24 hours

  • Organ donor expenses in some products

  • Emergency ambulance cover up to certain limit

  • Cumulative bonus on policy renewal in some products

  • Domiciliary hospitalisation expenses if Doctor suggests

See what top-up health insurance plans have in store for you 

Top-up health insurance plans majorly cover all the hospitalisation expenses. But they are different from health insurance riders as they are the benefits like hospital cash, personal accident cover, critical illness cover, etc. which you can add to your existing basic health insurance plan. But a top-up plan can be purchased irrespective of your standard health insurance plan. 

In simple words, top-up health insurance plans make sense when you wish to increase the cover but without paying so much. Though they have benefits similar to regular health insurance plans. 

The difference is that top up health insurance plans are easier on pocket. Also, in most if the health insurance plans, pre-medical screening becomes compulsory after 45 years of age but in top-up health insurance plans, there is no need of pre-medical screening up to the age of 55 years.  

If your regular health insurance policy reaches the maximum sum insured, then you can file claim for that plan as well as top-up plan at the same time. You can use both of them together even if they are from different health insurance companies.  

When does top up health insurance plan come into use?

Usually in top up health insurance plans, a single hospitalisation cover is offered. You can use your top-up health insurance plan when the hospital bill crosses the deductible limit.  

In case where an illness occurs again within 45 days after discharge, then it will be treated as single illness. Also, if the hospitalisation happens after 45 days after discharge, then it will be considered as a new illness. 

In short, you can only enjoy the benefits of top-up health insurance plan in case you cross the deductible specified. 

Selecting a top-up health insurance plan 

Many health insurance companies offer top-up health insurance plans. One can get a quote on after entering basic details online. 

While selecting top-up health insurance plans, you must look out for the options that have higher deductibles. See that the benefits are not repeated when buying extra coverage. Coverage features like dental treatment, daily cash allowance etc should not be given high importance as they might be covered under your standard health insurance plan. But what you must check for is the waiting period for pre-existing diseases, deductible criteria for single illnesses, maternity cover etc. 

Many insurers prescribe medical tests for people aged more than 45 years. As it varies from one insurer to another, so this is another thing you must check on while selecting a top-up plan.  

So, choose a policy only after ensuring if pre and post hospitalisation expenses, day care procedures, pre-existing diseases, etc are including in the coverage features or not. Note that premium paid for top-up health insurance plans are eligible for tax benefits under Section 80D of the Income Tax Act. 

Also Read

Top 6 Things to Consider While Buying Health Insurance

Top 10 Health Insurance Plans in India

To conclude, top-up health insurance plans are designed to fill the gap between actual hospitalisation and your continuing expenses. Having a top-up health insurance policy is an excellent back-up option for those who are either covered under individual health insurance plans or group health insurance policies. 

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