It acts as an additional health safeguard in case your basic insurance plan is not enough to take care of your medical bills
In India, getting people to understand the benefits associated with a health insurance plan is something that the companies still find hard to decipher. Still, a large number of individuals and families do not have health insurance as a safeguard against the ever rising medical bills. This has led to health benefits becoming unaffordable for the common man as paying from their own pockets is not always feasible or possible.
Keeping such people in mind, the health insurance companies operating in the country are offering add-on benefits for those who avail of an insurance policy, in the form of top-up plans.
Health is always going to be an area of top priority for insurance companies as well as the common man as almost everybody comes across a health issue sometime in her/his life that requires fairly large amount of expenditure. Insurance is the only way which maintains balance between quality healthcare treatment received and your account balance. The best thing with health insurance is that the amount of annual premium that is paid is very less as compared to the benefits you get from the same.
Insurers have also started to recognise health care requirements of people and have accordingly come up with customised plans and benefits to suit everyone’s need. If you are looking to buy any extra health insurance plan or top up plan, you can easily get the same with the help of an online insurance web aggregator which provides you with several options to choose from.
But before opting for any plan it is essential to check out the features thoroughly.
What exactly is a top up plan?
It is an extra health cover over your basic health plan.
For example, suppose you have a basic health insurance cover of Rs 3 lakh with XYZ Insurance Company. You can buy a health top up cover of Rs 4 lakh, with a deductible (explained below) of Rs 3 lakh.
If you get hospitalised and your total related expenses comes to around Rs 5 lakh, the first expense of Rs 3 lakh would be covered by XYZ Insurance Company from your basic health policy and the remaining Rs 2 lakh would be covered by your top-up plan.
What is a deductible?
Deductible refers to the amount you're responsible for paying for covered medical expenses before your health insurance plan kicks in and starts paying for covered medical expenses each year.
In the example above, your basic plan was of Rs 3 lakh. So, out of the total expense of Rs 5 lakh, your insurance company first paid Rs 3 lakh and the remaining Rs 2 lakh was paid through your top up plan.
This means that the company from whom you bought your top up plan paid only after you paid Rs 3 lakh from your basic insurance plan.
As the name implies, top up plan comes into effect only after you have exhausted the entire amount from your basic insurance plan.
Pros and cons of health top up plans
Pros: A top up cover is available at cheaper rate as compared to the full-fledged health plan for the same amount. This is because of the ‘deductible’ section of the plan. A top up cover can be very helpful if there is a possibility of high hospitalisation cost and when you don’t want to spend more money on the premium.
Cons: While a top up plan is useful, one has to be aware of the ‘deductible’ clause fixed in it. So you should be prepared that you will not receive the initial amount up to the deductible limit. Another con is that sometimes these plans usually do not work if there are several hospitalisations by the same person. You can buy a super top up plan to overcome this disadvantage.
How to make the most of a top up plan?
The best way to make the most of a top up plan is to choose the ‘deductible’ clause sensibly. Basically, it is fine to go for a deductible amount which is equivalent to the sum assured that you get from your basic health policy (be it with your employer or otherwise). This way, your costs up to the deductible amount would be covered by your basic health plan.
A top up is a great value add feature that you can avail of if you need any additional financial assistance beyond that provided by your existing health plan. So the next time you come across any medical emergency which requires you to dwell deeply into your pockets, take the help of a top-up plan that will help a lot in reducing your financial burden.
Illustration: Dominic Xavier/Rediff.com
Naval Goel is CEO and Founder, PolicyX