Many a time, people underestimate the importance of a big health cover supporting with feeble arguments ‘I have a sufficient cover or I am not prone to illness’ or ‘I can handle medical expenses’. Let’s take an example. Mr. Mishra had Max Bupa health insurance with Rs. 3 lakh coverage. He was living up with the notion that he was sufficiently insured until he met with an accident and the hospital expenses came around Rs.5 lakh, With no option left, his wife had to broke her FDs and children’s fund to arrange the money. If Mr. Mishra had taken up a top-up plan to supplement his health cover, he could have saved his financial goals.
You may take a sigh of relief believing that the health insurance offered by the employer will take care of your medical needs. But have you ever think what if the coverage offered by your employer's health insurance wouldn’t meet your expectations? This cover may be sufficient to pay for small medical expenditures but not for the huge one that could burn a hole in your savings or you may leave bankrupt. And not to forget that your employer offered health cover would cease once you leave the organization
It is also true that bigger health cover may not suit everyone’s wallet. This is where the top-up plan comes into the picture, which not only provides high coverage but also one can avail it at an affordable rate.
How top-up Plans Work?
This plan works on a cost-sharing basis where the policyholder is bound to borne the medical expenses up to a decided limit. The insurer takes charge of medical expenses only if the expense crosses the deductible limit. Above that limit, the top-up plan takes care of the expenses.
Under a top-up plan, sum insured is offered to range from Rs. 50,000 to 15,00,000, with the deductible falling between Rs. 30,000 and Rs. 5 lakh respectively. Top-up plan of Rs. 10 lakh cover can be purchased at an annual premium of Rs. 2,900. On the other hand, a health insurance plan with the same cover will cost somewhere between Rs. 7,450 -11,650, depending on the plan. You can save more than 50% with a top-up plan on premium.
Types of Top-up plans
We can categorise top-up plans into two categories. In the first one, the deductible limit is calculated on each hospitalisation. For instance, you have a base health cover of Rs. 3 lakh and a top-up cover of Rs. 5 lakh. Here you can decide Rs. 3 lakh as deductible as you can pay this money for regular health insurance. You get hospitalised with a medical expense of Rs. 5 lakh, the expense up to Rs. 3 lakh will be paid by your basic policy and above that, your top-up plan will pay the rest. But it would not cover the expenses up t threshold limit. If you don’t have the base policy, in that case, the initial 3 lakh will be borne by your and top-up plan will cove beyond that.
The second category is called as ‘Super Top-up Policy’ where threshold limit is applied to the total expense incurred during hospitalisation. In case a regular health insurance cover of Rs. 3 lakh and a top-up cover of Rs 5 lakh, you hospitalised twice, where your medical bills come amounting Rs. 2 lakh for the first time and 2.5 lakh for the second, the super top-up policy will get activated during the second time as the total expenses exceed the deductible amount. 1.5 lakh will be indemnified as the amount exceeding the deductible. Amount up to the defined deductible limit will be settled through an existing policy or by the insured.
Top-up plans to act as a supplementary policy to the actual health plan by offering dual benefits of low cost and higher sum insured. These plans are boon for those who enter their old age when a person is more prone to illness and medical expenses are bound to increase, so the premium is. Also, one who is covered by employer’s health insurance plan can opt for the top-up plan as well. This way you can ensure higher protection. This plan is meant to those who are looking for higher coverage in a cost-effective way.
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