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Why Having A Health Insurance Plan Is Essential As Back Up

Published On Oct 19, 2020 5:30 AM By Harshit pandey

Higher healthcare costs require adequate coverage in terms of sufficient Sum Insured amount. In case of expensive treatments, like organ transplantation, chemotherapy, etc., often the sum insured falls short of covering the overall expenses. Top-up plans are an essential back up for such emergencies.

How Top-up Health Insurance Works?

Let’s understand the working of a top-up health insurance plan with the help of an example. Suppose, Ms. A bought a health insurance policy with coverage of Rs. 5 lakhs as the Sum Insured. Now if she undergoes some treatment that costs Rs. 6 lakhs, she is left with no choice but to pay the differential Rs. 1 lakh from her own pocket. We might wonder, if she had a higher coverage, she would have saved that Rs. 1 lakh that she had to pay. This is correct. However, there is another way she could have avoided paying that money. If Ms. A had the same base plan with an additional top-up plan for Rs. 10 lakhs (with a deductible of Rs. 5 lakh), then the top-up plan would have taken care of the differential amount.

Let us try to understand the top-up plan with an analogy. Top-up plans work similar to top-up vouchers for pre-paid mobiles. There are many other examples; we thought this one would be easier to relate to. So, let us say you have a prepaid plan valid for the next 28 days with a calling balance of Rs. 100. But, due to heavy usage, you exhausted your balance by the 20th day. In order to continue using, you need additional balance. You get yourself a top-up for the remaining 8 days. In case of the mobile plan we had to exhaust the available balance of Rs. 100 before getting a top-up, and in case of health insurance we hit the deductible for the top-up – Rs. 5 lakh in the example above – for availing the top-up benefit.

How Can I Avail Higher Insurance Coverage?

There are two ways of availing higher coverage:

  • Higher sum insured
  • Regular sum insured with a top-up plan

Although most of us would be tempted to go for the straight forward higher sum insured approach, there are certain things to consider. Premiums for top-up plans can be quite affordable when compared to a high sum insured plan. For example, a 1 crore insurance plan costs Rs. 50 thousand for a 35 year old; A base plan of Rs. 5 lakhs with a top-up of Rs. 95 lakhs may cost Rs. 35 thousand for the same person, while providing similar coverage. This is primarily because of the high deductible component in the top-up plan.

Why Choose The Top-up Plan?

The benefits of choosing a top-up plan are as follows:

  • Economical Option: In comparison to getting the policy for the same amount, a top-up plan costs you less. As it has been explained with an example above.
  • Wider Coverage: A top-up health insurance plan helps you enjoy a wider coverage by providing you sum assured in addition to the one offered by your base health insurance plan.


In recent times, people are left to choose between a plan with a high sum insured or base plan with high top-up cover. While each has its own advantage, as mentioned above, often the top-up option usually wins primarily because of its affordability when compared to its higher valued counterpart.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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