Knowledge Centre

Upgrading with a top-up health insurance vs buying a new health plan

Published on July 21, 2020. EST READ TIME: 5 MIN   

Having a  health insurance policy  has always been important, as it protects you against unforeseen medical expenses that might quickly inflate. And in the light of the pandemic, such insurance is a must. Moreover, you should make sure that your health insurance provides you with adequate coverage in all kinds of medical emergencies. So, if you have a policy where the sum insured is not enough, what do you do? Do you buy a new health plan or get a top-up plan? To make this decision easy, read on about  top-up health insurance.

Top-up vs new Health Insurance Policy

What’s a  Base health insurance and what’s a top-up health insurance plan?

Health Insurance, as you already know, provides financial assistance when medical expenses arise. Affording quality healthcare facilities is not pocket-friendly always and the high cost of hospitalization can eat into your savings. However, if you have a health insurance policy in place, it will take care of your treatment charges.

Now, what happens if your medical expenses overshoot the sum insured? For such cases, you should be aware of a top-up health insurance plan . It covers treatment expenses but only after a limit, often known as the deductible. So, this deductible is a portion of the claim amount that the insurance company does not cover and it has to be paid by the policyholder. Once the threshold limit is crossed, the benefits of the top-up policy kick in. This deductible portion makes the plan an economical one as the liability of the insurer reduces. With a top-up plan, you can increase your health insurance cover at a reduced premium. But make sure that the deductible is not more than the sum insured you have taken in the base policy.

Benefits of base Health Insurance

  • Lots of options:
    So, when you decide to buy a plan, you have many choices, like whether you want the plan for an individual or the family.  You can choose the premium that fits your budget, the mode of the payment and also opt for instalment plans.  

  • Cashless treatment:
    Upon hospitalization, you do not have to pay for the treatment. The insurer takes care of it. If your plan specifies it, you can also get cashless treatment while you get treated at home. Whatever bills you pay during that time are reimbursed, as pre-hospitalization expenses up to 60 days of admission and post-discharge expenses till 180 days are covered.

  • AYUSH benefits:
    If you wish to opt for alternate therapies like Ayurveda, Unaani, Homeopathy, etc., even they are covered.

  • Other benefits:
    From organ donation to mental healthcare, the cost of several treatments is covered. In case of prolonged hospitalization, the policy may offer recovery benefits for the financial losses you may suffer. On policy renewal, you get free health check-ups. And the icing on the cake is that you can save tax up to INR 75,000*.

However, note that a health insurance policy does not cover injuries that happened during adventure sports or at any attempt to hurt oneself. The policy does not cover any claim that is caused due to war or injuries caused during participation in defence operations. Treatment for any sexually transmitted disease or cosmetic surgery is not included in the policy’s coverage.

Benefits of Top-up plan:

A top-up health insurance has the same inclusions and exclusions, but the plan kicks in only when the deductible is crossed.

  • Suppose you have a health insurance policy with a sum insured of INR 4 lakh and you want to raise the sum insured to INR 10 lakhs.

  • So, you buy a top-up policy with INR 4 lakh aggregate deductible and INR 10 lakh sum insured.

  • So, till INR 4 lakh, your basic plan covers your treatment costs, and beyond that, your top-up plan does it.

  • You can take a top-up plan as an independent policy as well, but in that case, you will have to first pay the INR 4 lakh to the hospital out of your pocket.

  • Some top-up plans allow a single claim settlement only, while others allow multiple settlements till the upper limit of sum insured is exhausted. So, read the policy papers carefully for that.


New Health Insurance

Top-up plan

Inclusions and exclusions

As mentioned above

Mostly same as any basic health plan

Sum insured and premium

The policyholder can take the call depending upon his needs and budget. The higher the sum insured, the greater will be the premium

It is more cost-effective as the component of the deductible lowers the risk of the insurer ,and thus, thepolicyholder has to pay a lower premium


None. The plan activates when medical expenses arise

The plan will not kick in till the deductible is crossed

Our Take

We believe that both health insurance and top-up plan are important and the policyholder should use them according to their need and budget constraints. Medical expenses are rising every day and affording them is increasingly becoming a challenge. So, while a health insurance policy will cover your treatment and hospitalization expenses, in case the expenses go beyond the sum insured, a top-up plan can offer the backup you need.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales. my:health Suraksha - HDFHLIP20049V041920 D2HI 803

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