Raise health insurance coverage with super top-up plans

Naveen Kukreja

Rakesh Arora, aged 30, has a Rs. 5 lakh health cover in place for himself and his wife. However, rising healthcare costs made Arora realize that a serious illness or accident may require expensive treatment and exhaust his health cover. What is also adding to his anxiety is the fact that as he grows older, health insurance will only become more costly. While he was considering buying an additional health insurance policy, a friend suggested him to go for either a top up or a super top up health insurance plan.

The reason being these plans offer a more economical and a better solution for people who are already covered under the group health plan of their employer or hold an individually purchased health policy, but want to increase their insurance coverage. Let’s understand how.

The base health policyWe all know that a health insurance policy is primarily meant to cover expenses pertaining to unforeseen health risks. The premium is dependent upon three major factors – number of members to be covered, age and sum insured. Higher the age or the sum insured, higher would be the premium. Normally, such a policy is bought individually or the coverage comes through the corporate.

Upgrade your sum assuredBut what if after buying the health insurance policy, you realize that you are not adequately insured and you need a bigger sum assured to ensure that your family is financially well protected against health emergencies. You can either opt for another insurance policy, which is usually an expensive option or you can go for the top-up or super top-up plans.

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“Top up” and “Super top up” are plans designed to provide an additional health insurance cover, over and above your existing health plan. These plans play the role of upgrading the sum assured of the base plan, providing you extra cover to meet rising medical costs during inflation.

How top-ups workA top up policy is primarily a deductible plan wherein there’s a pre-fixed initial amount post which the insurance kicks in. So, if you have a health insurance policy of Rs 5 lakh, you can go in for a top up plan with a sum assured of Rs 15 lakh with Rs 5 lakh deductible. This will give you an extra insurance cushion of Rs 10 lakh over and above your base plan, as the initial Rs 5 lakh will be covered by your base policy and the next 10 lakh by the top up. The deductible limit makes these plans cheaper.

However, in case of top-ups, every claim is considered individually. This is to say that if you make four claims of Rs 2 lakh, Rs 4 lakh, Rs 3 lakh and Rs 6 lakh in a year, your top up policy will only reimburse you Rs 1 lakh. This is where a super top-up policy can come to your rescue.

How super top ups work and why they are better than top upsA super top up is an improved version of top up policies wherein all claims are cumulated within a policy year. This is to say that if you have the same policy as a super top up, for the same claims made, you will be reimbursed Rs 10 lakh. Let’s understand this in more detail through an example:

The advantage with super top-up plan is that it takes care of expenses over and above the ones covered by your existing plan.Since it provides additional coverage at a relatively lower cost, a super top-up plan makes sense to a middle-class individual like Arora. The annual premium to be paid here is also very less as compared to a top-up plan or a high sum assured health policy. Moreover, super top-up plans need not be taken from the same insurer as your base policy.

How much it cost you?Now, suppose Mr Arora who has currently Rs 5 lakh health cover, wants to upgrade his sum insured to Rs 15 lakh.  He has three options. First, he buys another health cover of Rs 10 lakh. Second, he buys a top-up plan of Rs 10 lakh to compliment his already existing health policy. Or third, he opts for a super top-up cover of Rs 10 lakh. Here’s how these options will stack up against each other.

* Cheapest Health Cover (Religare Care) ** Cheapest Top-up Plan (Star Super Surplus) *** Cheapest Super Top-Up Plan (my:health Medisure Super TopUp)

The comparison clearly shows the price benefits of opting for a super top-up plan. Currently three health insurance companies, including Apollo Munich (Optima Super),  L&T (my:health medisure super top up) and Religare (enhance) are offering super top ups and we’re expecting more to launch this product as consumer awareness increases.

To sum up, the super top-up plans offer a very useful and affordable way for those covered under a corporate group health insurance plan or those having low sum assured under their existing health plan, to enhance their coverage.