What is a Top-up Health Insurance Plan?

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Top-up health insurance is an additional policy that enhances coverage of your base policy. This policy often acts as a cost-effective way to continue your medical facilities when the sum-insured of your base policy exceeds a specific limit.


You can purchase it often as a standalone plan that works alongside your existing individual or group healthcare plan.


What are the Features and Benefits of Top-up Health Insurance?



  1. Cost-Effective Premium


This policy is specifically designed to provide comprehensive protection at a lower cost. Therefore, you do not have to purchase a new policy even if your sum insured is fully utilised in a single policy year.



  1. Deductible Mechanism


Under this policy, you can only get extensive coverage if a single claim exceeds a fixed amount or deductible. In fact, unlike a super top-up, which aggregates all the annual claims to exceed the deductible once, top-ups apply to the deductible per claim.



  1. Fights Medical Inflation


According to the reports of the Economic Times, medical inflation in India is rising rapidly at around 12%-15% annually. Therefore, under such critical circumstances, there is a high chance that the sum insured of your base policy will be exhausted quickly.


However, if you have a top-up policy, you can ensure continuous coverage for every medical expense without any hassle of renewal.



  1. Extensive Protection for Chronic Conditions


Considering the rising medical inflation, policyholders who have serious illnesses or frequently visit hospitals can get extensive protection with a top-up or health insurance policy. With this coverage, they can reduce their out-of-pocket expenses even when the sum insured gets exhausted.


When Should You Consider a Top-Up Policy?



  • If you are covered under a low sum-insured plan.



  • You want to enhance the limited coverage of your employee-sponsored plan.



  • In case you are crossing your 50s and have higher medical needs.


How Does a Top-up Health Insurance Plan Work?


Now that you know the key features and benefits of a top-up health insurance policy, let’s understand how it works with an example.


Mr Roy has purchased a top-up health insurance policy with a deductible of ₹5 lakh. While he already has a base policy of ₹10 lakh.


After 6 months of buying the policy, he got hospitalised for a joint replacement, for which the hospital bill is ₹15 lakh. In this situation, since his hospital bill is exceeding the base policy limit, the top-up plan will automatically kick in. Therefore, he does not need to pay the extra ₹2 lakh out-of-pocket.


What is Covered in a Top-up Health Insurance Policy?



  • Pre-hospitalisation Expenses



  • Post-hospitalisation Expenses



  • Day care procedures (For hospitalisation for less than 24 hours)



  • Emergency Ambulance Charges


What is Not Covered in a Top-up Health Insurance Policy?



  • Illness or Injury caused by war or terrorism.



  • Self-inflicted Injuries



  • Cosmetic or plastic surgery expenses, unless medically required.



  • Injuries resulted from hazardous activities.


Final Words


With a top-up health insurance plan, you can cost-effectively get continuous medical assistance.


However, before purchasing this policy, you must consider your medical history, age and sum insured, along with the limits set in your policy.