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5 benefits of a health insurance top-up

By Finserv MARKETS - Jul 27,2019
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Benefits Of Health Insurance Top Up

What is a health insurance top-up plan?

Health insurance policies are indispensable in protecting you and your family against high, and often unaffordable, treatment costs for unanticipated medical emergencies and hospitalization. But what happens when treatment costs exceed your insurance cover? You may have to dip into your savings, or you could land in debt. Here’s where a top-up plan can come to your rescue.

Over your base cover, you can purchase a health insurance top-up plan for a nominal rate to ensure you don’t have to shell out lakhs in medical costs later on. The top-up plan will kick in after the threshold limit, called the deductible, has been crossed. A deductible is an amount that the policyholder has to pay either out of his own pocket or through their base insurance policy cover. After this threshold limit has been crossed, the top-up plan will come into effect and cover the expenses up to the plan’s insured limit.

What are the benefits of the health insurance top-up plan?


  • Inexpensive


Top-up plans are a cheap way to upgrade your insurance cover. Suppose you have an insurance cover of Rs 4 lakh, but you feel that this won’t be enough to cover a big medical emergency. Buying a new insurance policy, or asking your current insurer to upgrade your cover will both be costly options. However, if you buy a top-up plan, your insurance premium will be much lower than either of these options. Top-up plans are therefore a great way to get a higher cover at low costs.


  • Easily Available


Top-up plans are super easy to access. They are available to buy from a wide variety of insurers without any restrictions. You can compare different kinds of top-up plans available in the market and choose the best option for you. You can buy your top-up plan from any insurer, not necessarily your existing base cover insurance provider.


  • Higher Coverage


There is a misconception that top-up plans are like riders that provide additional or add-on benefits to the main insurance policy. However, top-up plans function as indemnity policies same as your other health insurance policies. They come with the same benefits and reimbursements and exist independently of your base cover policy. The only difference is that they’ll only kick in once your expenditure in a single incident exceeds the threshold limit. So if your top-up plan deductible is Rs 5 lakh, then the plan will only cover expenses exceeding Rs 5 lakh, up to the insured limit, in a single incidence of hospitalization. The higher the deductible, the cheaper your top-up plan will be.


  • Top Up With Family Floater


If you are looking to buy health insurance for your entire family, you can opt for a floater policy. Floater policies cover your entire family under one single cover. This is a much cheaper alternative than buying individual policy covers for each member of your family. Top-up plans are available to buy as floater policies as well. However, since a floater policy considers your family as one unit, make sure that the cover you buy is large enough.


  • Tax Benefits


Like your base cover policy, top-up plans are also eligible for health insurance tax benefits. The premiums you pay on the top-up plan will be tax-deductible under Section 80D of the Income Tax Act. If you pay premiums under a corporate health policy as well as Mediclaim (including top-up policies), covering yourself, your children and your spouse, you can claim a combined deduction of Rs 25,000 on your premium payments annually. You can claim an additional Rs 25,000 as a tax deduction if you are also paying premiums to provide insurance cover to your parents. If your parents are senior citizens (age 60 and above) then you can claim a deduction of Rs 50,000. In the first case, your combined benefit is Rs 50,000 and in the latter case (if your parents are senior citizens) your benefits increase to Rs 75,000.

If you’re in the market to insure your family against high medical costs, you can buy health insurance online on our platform. Health Insurance provides comprehensive medical coverage from Rs 2 lakh to Rs 50 lakh. And with the Extra Care Plus cover available on Finserv MARKETS, you can get top-up policies ranging from Rs 3 lakh to Rs 50 lakh, with premiums starting at just Rs 2,500 a year. You can get a family floater coverage for up to 6 family members with a single premium and single sum insured.

Top-up insurance plans are the best way to safeguard against exposure in the case of unprecedented medical costs. Not only are they independent of your base cover policy, but they are also the most cost-effective option to get you and your family higher coverage. Get your top-up plan now!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522