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A top-up policy refers to a health insurance plan with additional coverage above the basic coverage of the standard policy. A base insurance policy is necessary to make the most effective use of your top-up policy. Having a strong base insurance policy is also beneficial.  A top-up plan is only activated after you have exhausted the limit of your policy. Medical issues do not comply with your policy limits but paying for the extra medical expenses from your own pocket can be financially draining. A top-up health plan only comes into play when you are trying to increase the coverage of your original insurance policy. 

What is a top-up health policy?

A top-up health policy refers to a health insurance plan that extends additional coverage beyond the basic coverage of your standard policy.

This can be easily understood through an example of mobile recharge. If you have a prepaid phone plan, you recharge your phone for, let’s say, a month. Upon the expiry of the month, you can buy the plan again for another month and so it goes. However, if you run out of balance either for calls or SMS or data, you have the option to top-up your plan. This provides you with the option to get additional provision for calls or SMS or data beyond what your original plan offered you, by paying extra for it.


In the case of a health insurance top-up, this extra amount you pay is known as the deductible. A top-up plan is only set into motion when you — the policyholder — have exhausted the deductible limit on your policy. Medical issues don’t abide by your policy limits. But paying for medical expenses out-of-pocket can really break your financial health. So, if you max out on the claims made against the regular health insurance plan, then a top-up plan can come in handy.


Consider this: a policyholder is hospitalised and incurs a bill of Rs. 7 Lakhs, whereas his standard policy only covers Rs. 5 Lakhs. In the absence of a top-up plan, he will have to pay the remaining amount of Rs. 2 Lakhs on his own. With a top-up plan, the remaining amount can also be covered under insurance. The top-up acts as a buffer for unprecedented times.

Can I take a Health Insurance Top-Up without a Base Policy

NO, As Top-up policies are meant to be enforced when you surpass your deductible threshold. Going back to the example of mobile recharge, you will only top-up your data balance when you run out of your initial allocation. Similarly, a top-up health plan makes sense only when you are trying to expand the coverage from your original health insurance policy.


In order to make the most effective use of your top-up policy, a base policy is the starting point.

The Benefit of Having a Basic Policy

Having a robust base insurance policy is also beneficial for a number of other reasons.

One of the most prominent advantages is when the insurance provider offers you continuity in the waiting period for pre-existing diseases. What does this mean? Insurance plans have an in-built waiting period, until this time you cannot claim any amount. If you have a pre-existing disease, the waiting period can be as long as a year or two. If you have a pre-existing condition and get treatment for the same, the insurance provider may not cover any of it during the waiting period. It can be a real financial burden.


But with a top-up policy, you might get a shorter waiting period in health insurance, because providers often combine the waiting period for the top-up with the base policy. This continuity can save you a lot of money. There are other things you should watch out for in order to make the most of your health policy top-up plans.


Five Tips on Making the Most of Health Policy Top-up Plans

  • Figure out the financial side

Your top-up policies are meant to complement and add to the basic health insurance policy. It can be a cost-effective way to expand your health cover and strengthen it to face unforeseen medical difficulties without breaking your bank balance. But you need to make these computations before diving into the plan.


  • Assess carefully

Assess the utility of the top-up plan in accordance with your needs. If you don’t think the hospitalisation, treatment and other medical expenses in a year will shoot beyond the basic cover in your primary policy, then top-up may not be needed. But you should also chalk in unforeseen circumstances and make room for times when the threshold deductible might be surpassed. FOr example, if your policy covers only Rs 3 Lakhs, you may not need more for regular hospitalisation bills. But if there’s an accident or serious diagnosis, it might drastically shoot up the hospital costs.

  • Understand the deductible

How does the deductible concept work? If you have a Rs 5 Lakhs health plan and the deductible is Rs 2 Lakhs, it means that your insurance provider will pay Rs 3 Lakhs as the top-up claim amount. You need to ensure that the deductible in health insurance of the top-up policy is near to the sum that you are insured for in your primary health plan.


  • Stick with one insurer

As mentioned before, having the same insurance provider for both the base plan and the top-up can result in a shorter waiting period for pre-existing diseases.


  • Claim IT deduction

Just like any health insurance plan, the premiums you pay on your top-up plans are also eligible for income tax deductions under Section 80D.


Spending a little more on the premiums for a top-up plan can save you an enormous amount of money later when the need arises. If you think about the unforeseen circumstances that can lead to gigantic hospital bills, extended coverage through top-ups will make a lot of sense. Find the best health insurance plans on Bajaj Markets and fortify against all medical emergencies.

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Frequently Asked Questions

What is a top-up health insurance policy?

A top-up health policy refers to a health insurance plan that provides additional coverage when you exhaust the threshold of your standard policy.

Can I claim an income tax deduction on the top-up premium?

Yes, the premiums paid on top-up or super top-up plans are eligible for income tax deductions under Section 80D.

What is a pre-existing condition?

A pre-existing condition or illness refers to any health issue that the policyholder has been facing, living with or dealing with since before the purchase of the health insurance policy.

What factors determine your top-up plan premium?

Your age, where you live, the deductible and the amount of sum insured are factors that determine how much premium you will pay. 

Why do I need a top-up insurance plan?

Your basic health insurance plan covers your medical and health care-related needs, but you might need additional funds in case of medical emergencies. A top-up plan helps in such cases. 

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