There are around 34 million households in Bangladesh. Now, you must be thinking, how is our eastern neighbour connected to health insurance plans? Well, according to the last health survey conducted by the National Sample Survey Office 36 million households in India incurred health expenses that exceed the annual per capita consumption of those households. The data provides a chilling perspective of the rising cost of medical care in the country. The situation where annual health expenses are greater than the annual per capita consumption of a household is known as ‘catastrophic health shock’. More than 36 million households in the country suffer catastrophic health shocks every year, which highlights the importance of having medical insurance.
With increasing life expectancy and an improvement in medical facilities, the cost of healthcare is rising. Many people have health insurance, but still, get singed by the hefty cost of hospitalization. Quite often, the hospital bill exceeds the insurance cover limit, the balance is paid out of the policyholder’s pocket. To avoid situations like that, you will have to either take additional medical insurance or opt for a top-up plan, which is way cheaper.
What is a top-up health insurance plan?
A top-up plan covers medical costs over the amount covered by a regular policy. Think of it like a car’s spare tyre, it sits idle when all the tyres are fine, but comes to the rescue when one of the tyres gets punctured. Top-up plans get activated after a threshold amount is exhausted. For instance, you get hospitalised and get a hefty bill of 700,000 rupees, but you have a regular health plan of just 500,000 rupees. Now, if you don’t have any other policy, you will have to dip into your savings to pay the balance 200,000 rupees. If you have an active top-up health insurance cover of 1 million rupees, with a threshold of 500,000 rupees, then the top-up policy will pay the balance 200,000 rupees.
Should you get one?
Top-Up health policy has become a necessity as medical costs are rising steeply and the base policy often falls short. The proportion of Indian population reporting out-of-pocket payments for medicines has risen to 80 percent in 2011-12 from 60 percent in 1993-94, a study by the British Medical Journal (BMJ) found. Policies like top-up health plan are only beneficial if you have an existing individual plan or a mediclaim from the employer. Suppose you have an existing health cover of Rs. 300,000, but you want to increase it. You can either take a separate health policy or can ask your insurer to upgrade your plan. Both are expensive options when compared to a top-up plan. Health insurance premium for a top-up policy is generally one-third of a typical medical insurance plan.
Family Floater Available
Most top-up plans have family floater cover, along with an individual cover. You can extend your cover to the whole family, just read the fine print as some insurers don’t consider parents in family cover. For example, Bajaj Allianz Extra Care Plus top-up policy includes dependent children and parents in the family floater plan. It also covers pre and post hospitalization up to 60 and 90 days respectively. Most of the policies in the market do not cover pre and post hospitalization expenses.
The advent of online portals like Finserv Markets has made buying top-plans very easy. There is no compulsion to buy the top-up plan from your existing insurer, you can choose a different company also. However, an insurer can impose restrictions on pre-existing illness while covering you under a top-up plan. You can also claim income tax deduction under section 80D for top-up policies.
As the saying goes, “Precaution is better than cure.” It is better to get a top-up plan at the earliest than pay out of your own pocket after a costly hospitalization. Top-plans are a cheaper option to get an additional cover and most insurers do not ask for health check-ups up to 55 years. Buying a suitable top-up plan is just a few clicks away on Finserv Markets. Visit the portal to choose from a wide variety of health insurance and top-up plans for your family.
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