Health insurance is necessary to cover up the huge expenses on account of medical bills in case of critical illness. It is an essential risk management measure related to health issues, which everyone should consider. But the question is that, is your current health insurance policy sufficient to cover up unforeseen risks related to critical illness. Now a day, the treatment is so costly that you cannot assess the risks. The medical expenses are so high rocketing that you never know, when your current medical insurance policy will be exhausted. If you increase the policy cover then it becomes costlier. Then how to cover the additional risks apart from which your current medical insurance policy is covering? The answer is Top- up health insurance policy. Let us learn more about top- up health insurance policy in this blog.
What is Top- up Health Insurance Policy?
Top- up health insurance policy is an indemnity policy that provides additional cover to the people having existing medical insurance policy or employer’s mediclaim policy. In case your existing regular medical insurance policy is exhausted, then this top- up policy comes into picture and it provides you additional insurance coverage.
Let us understand the top- up medical insurance policy with the help of an example:
Suppose a person has taken a regular health insurance policy with sum assured value of Rs. 15 lakhs and the top up health insurance policy of Rs. 25 lakhs. If the person has registered a claim of Rs. 35 lakhs then the additional claim of Rs. 20 lakhs will be covered by the top up policy. Now, suppose the actual claim registered is Rs. 45 lakhs, then the person will be entitled to have a claim of only Rs. 40 lakhs and the additional Rs. 5 lakhs will not be covered by any policy and shall be paid from the pocket of that person.
The main advantage of top up plans is that they are affordable and provide you a good sum assured at a reasonable price. If you realize that your regular insurance plan is not sufficient to cover the increasing medical expenses of treatment of critical illness, then you can go for top up health insurance policy.
Advantages of top up Health Insurance Plan
- You get sufficient coverage at a reasonable price. Even if your regular health insurance policy is exhausted you can feel peace of mind as you are still covered.
- You can buy a top up plan even if you don’t have a basic health insurance policy.
- It is easily convertible to a basic insurance plan.
- If both the parents are covered then you can include your children in the same plan.
- No pre medical checkup is required up to a certain age.
- Lifelong renewable option is provided.
- You can avail tax benefits on the insurance premium paid under section 80/D of the income tax act.
What is Covered under Top up Health Insurance Plan?
The coverage of top up health insurance plan depends upon the type of policy and it varies from one insurance provided to another, but generally it covers the following:
- Coverage of expenses for hospitalization expenses including nursing and boarding charges, doctors’ fees, OT charges, cost of oxygen, prosthetic devices or implantation of any other equipment during surgery, blood, diagnostic procedures, and other similar expenses
- Pre hospitalization expenses 60 days prior to hospitalization
- It also covers post hospitalization expenses up to 90 days immediately after hospitalization
- Organ donor expenses
- Emergence ambulance expenses up to a specified limit
- Domiciliary treatment expenses, as suggested by the doctor
- Some insurers also provide a cumulative bonus at the time of policy renewal
Top up health insurance plans provide all the benefits similar to the regular health insurance plan. They are like an indemnity plan which protect the insurer against the risk of medical expanses even after the regular plan is exhausted. The only difference is in the cost of deductibles which makes these plans pocket friendly. Moreover, in a top up health insurance plan, pre-medical screening is not required up to an age of 55 years, while in basic health insurance plans it becomes mandatory after the age of 45 years.
When You Should Use Top up Health Insurance Plan?
The top up health insurance plan is usually triggered when the threshold limit of regular plan exceeds. Usually, a single hospitalization cover is provided by the top up insurance plan.
Suppose the threshold limit of your top up plan is Rs. 5 lakhs and you have made two claims of Rs. 3 lakhs and Rs. 1.5 lakhs respectively. The top up health insurance plan will not cover any of the claim because they have not crossed the threshold limit of Rs. 5 lakhs.
Selection Criterion of Top up Health Insurance Plan
The top up health insurance plan should be taken for higher deductibles. It should be kept in mind that there should be no duplication of the actual benefits while buying the extra coverage.
Exclusions like daily cash allowance and the dental cover shall not make a huge difference as they may be covered by your regular health insurance policy.
You should also check the waiting period in regards to the pre- existing health conditions, coverage for pre and post hospitalization expanses, deductible criteria pertaining to single illness, maternity cover, etc.
You should also check whether the top up insurance plan also covers the medical expenses of your family members, including parents, spouse and children or not.
Conclusion
Top up health insurance plan is really useful to fill a gap between the sum assured of your existing health insurance policy and actual medical expenses. A top up health insurance plan is an affordable option to enhance your coverage keeping in view of the present cost of medical care and treatment, which is expected to increase more in future. It is a feasible option for the people already covered under a single policy, a group insurance policy or under a health insurance policy provided by the employer.
