What Is The Distinction Between A Top-up Health Insurance Plan And A Super-top-up Health Insurance Policy?
Published On May 30, 2022
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An insurance plan acts as a protection against a financial loss. This forms a contract between the insurer and the insured. Purchasing an insurance plan is expensive for an individual. To receive coverage, one has to pay premiums. In some cases, the cover offered is not sufficient for an individual, yet it is very difficult for one to purchase a second insurance plan.
For such people, two new instruments have come up under the subsections of insurance; top-up insurance and super top-up insurance. Let’s understand them in detail.
What is a Top-up Insurance Plan?
Top-up health insurance provides additional cover to an individual for a single claim. This plan extends the threshold limit offered by the base plan. It means that such a plan will cover an individual or a family against a financial strain in the event of medical emergencies just by providing additional coverage for a small cost.
Such a policy is subscribed by a person who believes that the coverage offered by their base plan is not sufficient and buying second health insurance is not affordable.
What is a Super top-up Insurance Plan?
A super top-up insurance plan is the additional coverage received by the insured on payment of additional premium. The cover offered in such a policy is for multiple claims. The claims can be diverse and do not need to have the same illness caused in the past. A person can claim after one or multiple hospitalizations. The Super top-up plan comes into the picture only when the deductible amount chosen by the insured has surpassed.
Top 8 Features Of A Top-up Insurance Plan
- Convertible: A top-up insurance plan can be easily converted into a health plan in case the insured wishes to do so or during a medical emergency.
- No sub-limits: While giving admission to the patient in the hospital, expenses such as costs of medicines, room rent, medical practitioner’s fees, and more are chargeable. The top-up insurance provider does not set any sub-limit or restriction on such hospitalization expenses.
- Bonus: In good times like the insured not being admitted for hospitalization and being healthy for a year or more, the insurance provider pays-out a No-claim bonus or NCB to the insured. It is also called a cumulative bonus.
- Medical Screening: An individual purchasing such a plan will not have to go through any such tests if he/she is below the age of 45 years. The eligibility factor of age varies from company to company.
- Lifelong Renewability: An insurance company provides life-long renewability to the insured. Such a contract does not need to be time-bound.
- Tax Benefits: The purchase of an insurance plan is a plan to which tax benefits are substantial. These benefits are given under Section 80D of the Income Tax Act, 1961. This helps an individual enjoy the benefit of tax exemption of up to INR 1.5 lakhs.
- Purchase: Such a plan is purchased from the base plan insurer. It is not compulsory to subscribe for a top-up policy from the same insurer. A person can opt for such a plan from another insurance provider.
- Free look-up period: An insurance provider gives the insured a look-up period of 15-30 days, meaning within the days provided a person can surrender the policy without any penalties such as surrender charges.
The Features Of Super Top-up Insurance
- Tax Exemption: Under section 80D of the income tax act, an insurance holder enjoys the benefit of tax exemptions.
- Covers Pandemic: In such a situation of COVID-19, an insured does not need to worry as, in case of any contingent condition, the plan will provide coverage to the individual. The policy will provide coverage if the insured is admitted to a hospital for less than 24 hours and also when the bill has exhausted the base plan amount.
- Coverage: This plan provides coverage for in-patient hospitalization, pre and post-hospitalization, as well as medical day care procedures.
- Customization: A person purchasing super top-up health insurance can comfortably customize the plan according to his/her requirements.
- Room Rent: The insurance company does not set any such sub-limit on the room rent of the insured. The policyholder can choose a private room if needed.
- Premium and Coverage: The premium paid for such a policy is low and thus affordable. The cover offered by the insured exhausts only when the amount invested has been exhausted.
The important point in top-up and the super top-up plan is to check the pre-existing conditions to the policy. The insured shall choose the deductible amount wisely. The deductible amount shall always be less or equal to the base plan.