I have been advised to buy a top-up health insurance plan. A quick scan of online listing reveals that there is also such a thing as a super top-up plan. How should I decide what to buy? — N. Nipun
Healthcare inflation is steep and hospitalization gets increasingly expensive each year. You may find your basic health insurance coverage to be insufficient. For example, the cost of cancer treatment in a complicated case may easily exceed Rs. 10 lakh. To address such issues, health insurance companies offer products called top-up and super-top up health policies.
Under a top-up policy, the insured gets the benefits of health cover on exhausting the agreed deductible/threshold hospitalization cost. For example, suppose you have taken a top-up health policy of Rs. 10 lakh above a threshold of Rs. 5 lakh. So, if your hospital bill is above Rs. 5 lakh during the policy period, your top-up policy will cover it up to the limit of Rs. 10 lakh. Let’s understand this better. Let’s say your hospital bill is of Rs. 7 lakh. Rs. 5 lakh needs to be paid either by your base health policy or by you. The remainder — Rs. 2 lakh — will be covered by the top-up policy. However, in the same year, let’s say you made another claim of Rs. 4 lakh. Then, the top-up policy won’t cover it because it falls below the threshold of Rs. 5 lakh. So the top-up policy doesn’t consider the aggregate hospitalization bill during a year.
A super top-up policy considers the aggregate hospitalization bill during the year for calculating the risk cover. Suppose you have taken a super top-up cover with a deductible of Rs. 5 lakh. In the above example, the total hospitalization bill in the first case was Rs. 7 lakh, so you’ll get Rs. 2 lakh from the super top-up, and in the second case, you’ll get the entire claim of Rs. 4 lakh because you have already exceeded the deductible of Rs. 5 lakh during that policy period.
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