Overview of Top-up and Super Top-up plans in Health Insurance

Thanks to the digitization of the Indian insurance sector, there has been a lot of awareness about the benefits of a health insurance policy. Nowadays, affordable health insurance policies can be purchased online conveniently through smartphones. However, there’s still a giant question mark looming over laymen when it comes to understanding the nuances of a health insurance policy.

Also, purchasing a Comprehensive health plan can be expensive. And opting for a ‘low-premium, low-coverage’ plan will not entirely serve the purpose of shielding you from medical expenses. Thus, there is a need for understanding one’s health insurance needs, knowing one’s budget, and picking the best-suitable plan on offer. This is where Top-up and Super Top-up health insurance plans can help in offering substantial health coverage at a manageable cost.

Important Terminology

Base Plan

Your general health insurance plan is termed as a base plan. Top-up and Super Top-up plans offer insurance cover over and above this base plan. For example, if you have an individual health insurance policy of Rs 3 lakhs, that is your base plan.

Deductible

A deductible in this scenario is a threshold over which the Top-up and Super Top-up plans come into effect. For example, a Top-up plan might have a deductible of Rs 4 lakhs. This means the Top-up plan will come into effect when your hospital bill is over Rs 4 lakhs.

Top-up Plans

Top-up plans are designed to offer additional health insurance coverage. These plans offer enhanced insurance cover in addition to the existing base plan. Top-up plans offer insurance coverage over and above the predetermined deductible limit.

For example, Mr A has an individual health insurance plan of Rs 3 lakhs. This is the base plan. He purchases a Rs 7 lakhs Top-up with a deductible of Rs 3 lakhs. If Mr A is hospitalized and has to settle a bill of Rs 5 lakhs, the base insurance policy will cover Rs 3 lakhs and the remaining Rs 2 lakhs can be settled by the Top-up plan. However, if an additional claim of Rs 4 lakh is raised, it will be covered by the Top-up plan over the deductible limit. The payable amount for the second claim will be Rs 1 Lakh. For a Top-up plan, the deductible is applicable on each claim.

Super Top-up Plans      

Super Top-up plans are superior versions of a Top-up plan. This is because, for a Top-up plan, the deductible will be applicable on each claim, while for a Super Top-up plan deductible will be applicable on an aggregate basis. Thus, in the example mentioned in the Top-up plans section, the second claim of Rs. 4 lakhs will be covered in case of a Super Top-up plan.

Which one to choose, Top-up or Super Top-up?

The prime difference between Top-up and Super Top-up plans is the latter’s ability to help you out comprehensively in case of multiple claims. Thus, if you feel you are likely to claim multiple times during the policy period due to your health situation, chronic disease, or lifestyle, you can opt for a Super Top-up plan. Otherwise, a Top-up plan should be good enough to offer extra coverage over your base plan.

Key Highlights

Here are some points to consider while buying a Top-up/Super Top-up plan.

A Top-up/Super Top-up plan can be purchased directly without buying a health insurance policy.

You can purchase a base plan from a different insurer and a Top-up/Super Top-up plan from a different insurer.

Top-up/Super Top-up plan is less expensive as compared to a health insurance policy.

Top-up/Super Top-up plan is settled as per the Reimbursement claim settlement process.

You can avail tax benefits on the premium paid for Top-up/Super Top-up plan as per the terms and conditions.

 By Biresh Giri, Appointed Actuary & CRO, Acko General Insurance