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How Can Top-Up Plans Improve Your Health Insurance Coverage?

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Let’s face it. We all think we are leading a healthy life owing to that diet chart we have been following since it went viral on Instagram and are on a fitness regime with help of a new app. And boom! The myth bursts when you find yourself or a loved one on the hospital bed down with a major ailment or a road accident.

You thank God, for having the health insurance to take care of the expenses while getting the best medical services available. But let’s say another shock awaits you. Courtesy rising prices, the costs have risen and now the medical expenditure is going beyond your insurance cover. What do you do next? Say goodbye to all your savings meant for a trip or buying an appliance. But what if someone tells you that a tiny sum of premium would have saved you all the troubles? Well, say hello to health insurance top up plans.

To put it in simple terms: What a stepney is to your car, top-up health plans are to your existing health insurance – a plan that says “We have got your back, bro!”. Your regular health policy reimburses hospital bills up to the sum insured while a top-up health plan covers the costs after that particular threshold/ deductible is crossed. Suppose, you have a health plan of Rs 2 lakh and the bill turns out to be Rs 3 lakh, the additional one lakh will be covered by the top-up plan. This is an additional coverage for those with an existing plan or a mediclaim from the employer. They serve the dual benefits of low cost and higher sum insured.

You would now wonder why take this top-up plan and not buy a separate health insurance or upgrade the existing plan. Well, because the yearly premiums are way cheaper. They save you 50% or more on the premiums compared to a new or upgraded plan. Top-up health plans provide the same benefits as regular health policies and are independent covers that can be bought separately from different insurance companies and to add to the wow factor, they offer tax benefits too. Experts suggest that one must select the threshold limit up to which you or your existing policy can comfortably pay the medical bills.

But here’s the catch on which you should base you choice of buying a top-up plan – they have a high deductible (because higher the deductible, cheaper the plan) and generally cover only single hospitalization (If relapse happens within 45 days of discharge from hospital, it is taken as single illness). For example, if a person with a top-up cover with a threshold of Rs 4 lakh gets hospitalised twice in a year with bills of Rs 3 lakh each, the top-up plan will not be triggered.

Similarly, in a family plan under which two members are hospitalised with individual bills of Rs 3.5 lakh each, top-up plans don’t come into the picture, well unless you have opted for the 'super top-up' plans that add the expenses from two or more hospitalizations to calculate the deductible but their premiums are slightly higher. But in both cases, the deductible has to be crossed to avail benefits.

HDFC ERGO offers 5% discount on opting for a two year policy, 10% family discount when three or more family members are covered under individual Sum Insured basis, lifelong renewability, and the policies cover 30 days pre-hospitalization & 60 days post-hospitalization expenses. The pre-existing waiting period is just 3 years and response on every cashless claim within 6 hours is guaranteed. No medical tests are conducted up to the age of 55 years, if there is no pre-existing illness.

So, in short when your existing health cover gets exhausted, top-up or the more preferred super top-up health plan comes into effect to offer you protection in your financial crisis during medical emergencies and HDFC ERGO is a great place to get one from.

Links referred:

https://www.businesstoday.in/moneytoday/cover-story/what-are-top-up-insurance-plans-and-how-do-they-benefit-you/story/185705.html

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before going ahead with the purchase.