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A Top-up health insurance plan is an add-on cover to increase the health insurance cover to the policyholder.
Medical bills may exceed the health insurance coverage and pay by out-of-pocket expenses, and our financial stability is at stake. Top-up plans offered by insurance companies are a boon in such scenarios.
Who can avail the top-up health insurance plan?
Medical emergencies are covered cost-effectively. Being ready for quality healthcare without worrying about medical treatment costs. By buying a Top-up health insurance plan, one gets financial freedom and peace of mind.
- Cost-effective protection against ever-rising medical treatment costs.
- People who have to pay more than the cover given by their employer,
- People who have lower coverage under their individual/family cover.
- People who can convert their top-up plan to a regular cover, post-retirement with renewal benefits
- Tax Benefit under Section-80D
- All Premiums paid towards health insurance premiums can avail tax –exemptions.
How does Top-up Health insurance Plan work?
To understand the working of top-up policies, you should know two terms one is Deductible & Defined Limit (Aggregate Deductible)
- Deductible – A deductible is an amount the policyholder agreed to pay towards every admissible claim for each hospitalisation.
- Defined Limit (Aggregate Deductible) – A defined limit is an aggregate amount of admissible claims that the policyholder has agreed to pay during the policy period.
Case Study
If the insured has a top-up policy of sum-insured is 10 lakhs with a 1lakh deductible.
| Case study on opting for Top-up with Deductible | ||||||
| Period of Claim | Claims during the same year | Sum Insured (Deductible) | Insured to pay for each Claim | Admissible claim Amount Payable | Amount payable | Balance Sum insured available for future claim |
| 21- 22 | 1st | 10 lakhs (1L) | 1 Lakh | 5 Lakhs | 4 Lakhs | 6 lakhs |
| 21- 22 | 2nd | 6 Lakhs (1L) | 1 Lakh | 3 lakhs | 2 lakhs | 4 lakhs |
| 21- 22 | 3rd | 4 Lakhs (1 L) | 1 Lakh | 4 lakhs | 3 lakhs | 1 lakh |
| 21- 22 | 4th | 1Lakhs (1L) | 1 Lakh | 2 lakhs | 1 lakh | nil |
| Case study on opting for Top-up with Defined (Aggregate Deductible) | ||||||
| Period of Claim | Claims during the same year | Sum Insured (Defined ) | Insured to pay for per policy period | Admissible claim Amount Payable | Amount payable | Balance Sum insured available for future claim |
| 21- 22 | 1st | 10 lakhs (1 lakh) | 1 Lakh | 5 Lakhs | 4 Lakhs | 6 lakhs |
| 21- 22 | 2nd | 6 lakhs | Nil | 3 Lakhs | 3 lakhs | 3 lakhs |
| 21- 22 | 3rd | 3 Lakhs | Nil | 3 Lakhs | 3 lakhs | nil |
What does a Top-up health insurance Plan offer?
Ready for increasing and dynamic costs of hospitalisation. It is similar to that of any regular health insurance plan. This Plan offers an amount payable towards treatment expenses for illness or accidents in a hospital or day-care center. The deductible is the maximum amount policyholder need to pay before their insurer pays for covered losses. A higher deductible lowers the premium. The waiting period for Pre-existing and Specified illnesses is 12 months from the policy inception under the defined limit.
To Conclude
Top-up Health Insurance is a cost-effective way to have higher medical insurance coverage. Always choose a policy with an aggregate deductible. Do prefer with the lowest waiting periods for Pre-existing diseases coverage. Beat the medical inflation and bridge gaps under health insurance coverage. The realistic way to increase health coverage for persons covered under corporate, individuals, and families with low insurance cover
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The Information including but not limited to text, graphics, images and other material contained on this blog are intended for education and awareness only. No material on this blog is intended to be a substitute for professional medical help including diagnosis or treatment. It is always advisable to consult medical professional before relying on the content. Neither the Author nor Star Health and Allied Insurance Co. Ltd accepts any responsibility for any potential risk to any visitor/reader.