How Does Top-Up Health Insurance Work?

Posted on: Feb 16, 2024 | 3 mins | Written by: HDFC ERGO Team

How Does Top-Up Health Insurance Work?

A top-up policy is ideal if you want higher coverage at a lower cost. It helps you handle large medical bills without having to pay huge premiums for a higher base policy.

Here is how it works:

• The top-up plan activates only after your medical expenses cross a predetermined deductible amount, also known as the deductible.

• For example, if your base policy covers up to ₹5 lakh and you have a top-up plan of ₹10 lakh with a deductible of ₹5 lakh, then expenses beyond ₹5 lakh will be paid by the top-up policy.

What is a Top-Up Health Insurance Plan?

Rising medical costs have made it important to have more than just a basic health cover. A top-up health insurance plan is an additional cover that kicks in when your existing coverage limit is exhausted.

Top-Up vs. Super Top-Up Plans: Key Differences

Many confuse between top-up and super top-up plans. Here’s how they differ:

Feature	Top-Up Plan	Super Top-Up Plan
Trigger	Activates if a single claim crosses the deductible	Covers total hospital bills in a year once cumulative expenses cross the deductible
Example	If you have two claims of ₹3 lakh each with a ₹5 lakh deductible, the top-up won't pay	Super top-up pays once total claims exceed ₹5 lakh

Super top-up plans are more flexible as they consider multiple hospital bills in a policy year. Top-up plans only look at each claim individually.

Benefits and Coverage of Top-Up Health Insurance

Here is why you should consider adding a top-up policy to your existing health insurance:

1. Higher Coverage at Lower Cost

• You get more coverage without having to pay a high premium.

• Ideal for families with a history of high medical expenses.

2. Financial Safety Net

• Helps tackle high treatment costs for serious illnesses or surgeries.

• Reduces out-of-pocket expenses once base coverage is exhausted.

3. Flexibility

• Can be added to any base plan from any insurer.

• You can choose your own deductible and coverage amount.

4. Tax Benefits

• Premiums paid for health insurance are eligible for tax deductions under Section 80D of the Income Tax Act.

How to Choose and Apply for a Top-Up Health Insurance Plan

Choosing the right top-up plan needs careful thought. Here are some tips:

Check Your Base Coverage

• Know your current health policy sum insured.

• The deductible should be equal to or less than this amount.

Choose the Right Deductible

• Higher deductible means lower premium.

• Balance your affordability and risk.

Compare Plans

• Compare coverage, exclusions, waiting periods and claim processes.

• Check if pre-existing diseases are covered after a waiting period.

Read the Fine Print

• Understand what’s covered and what’s not.

• Check if day-care procedures, maternity cover and critical illnesses are included.

Buy Early

• Younger buyers get better premiums.

• Avoid last-minute buying when health risks increase.

Application Process

• Fill the proposal form honestly.

• Go through medical tests if required.

• Pay the premium online and get your policy document.

Conclusion

A top-up plan can be a smart choice for those who want to stay prepared for large medical expenses without burning a hole in their pockets. Now that you know how does top-up health insurance work, take time to compare plans and select the one that best suits your family's health needs.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

Find Out How Top-up Plans Can Upgrade your Existing Health Insurance Policy

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