Richa had a health cover with Rs. 4 Lakh sum insured. She believed she was sufficiently insured until she had to undergo a major surgical procedure and the medical bills shot up beyond Rs. 5 lakh. She was left with no choice but to withdraw savings meant for her first car. If Richa had taken a top-up health insurance plan to supplement her primary medical cover, her financial goals would not have been disturbed.
What is a top-up health insurance?
Top-up health insurance is an add-on plan for your regular health policy or Mediclaim from your employer. The top – up plans offer an additional cover when you exhaust the sum assured limit of your primary policy. Unlike your normal health plans, top-up policies are accompanied by a threshold limit/deductible. The threshold limit can be selected at the time of purchasing the top-up plan, based on your existing mediclaim policy. A deductible is an amount of money which you, as an insured, have to pay from your own pocket or from your base health insurance/group insurance (up to the limit specified in the policy). Once you have paid the deductible, your insurance provider will pay for your claims thereafter (up to the sum insured).
For example, if you have a personal health insurance cover of Rs. 5 Lakh for an annual premium of Rs.6500, and you wish to further enhance the cover by an additional Rs. 5 lakh. In this scenario, buying a separate health plan for 5 lakh extra cover would cost you around Rs.6000-7000 annually. On the other hand, you can buy a top-up health plan for 10 lakh that has Rs. 5 lac deductible, for just at an annual premium of Rs. 2500 per year – a choice that makes better sense, and saves up to 50 percent on your premium when you want to enhance the coverage.
What are the types of Top-up plans?
Top-up plans can be differentiated into two categories based on the deductible limit and incidences of hospitalization:
Simple top-up plan
The deductible limit herein is calculated on each incidence of hospitalization. For instance, if you have a base policy cover of Rs. 5 Lakh and a top-up cover of 10 Lakh, the deductible limit would be set as Rs. 5 Lakh as it can be paid from the existing base policy. If you get a bill of Rs. 8 Lakh on hospitalization, the base policy shall cover Rs.5 Lakh, and the top-up plan would cover the remaining amount of Rs. 3 Lakh. The top-up plan will not cover your hospital expenses until the deductible limit is reached, and this benefit can be availed only upon single incidence hospitalization in a year. This top-up plan will lapse after a single hospitalization claim and will not cover your expenses if you are hospitalized multiple times in a year.
Super top-up plan
Here the deductible limit applies to aggregate expenses incurred during the policy year for multiple incidences of hospitalization. Consider this scenario, with a base policy of Rs. 5 Lakh, and a super-top up plan of Rs. 10 Lakh, you are hospitalized twice in a year with bills amounting to Rs. 4 Lakh for the first time and Rs. 5 Lakh for the second. The super top plan will trigger during the second hospitalization as the total expenses of Rs. 9 Lakh cross the deductible limit of Rs. 5 Lakh. The policy shall indemnify the claim with Rs. 4 Lakh, which is the amount exceeding the deductible limit. The top-up policy lapses only when the entire cover is exhausted upon multiple hospitalization claims.
Eligibility Criteria for top-up health insurance
Getting a top-up health insurance policy is easy and fast, but also dependent upon fulfilling the following eligibility criteria:
- The policyholder and the spouse must be between 18 and 70 years.
- Dependent children aged between 3 months and 18 years can be covered if both the parents are insured.
- Individuals from 18 years to 25 years can be covered as self-proposer or as dependents if both parents are insured.
- Dependent parents can also be covered under the same plan, but a separate policy is issued to the parents. The highest age of the family member will define the premium amount.
The foremost reason to purchase a top-up health insurance plan would be its high amount of health coverage for cheaper premiums, as compared to a rider cover or an altogether separate insurance policy. Given that there is no dearth of top-up plans flooding the market, one needs to be a little smart while choosing from them. Bajaj Allianz’ simple top-up plan and super top-up plan, namely Bajaj Allianz Extra Care Plus Policy and Bajaj Allianz Extra Care Plus Policy are good choices that allow you to extend your existing health cover in the event of single incidence hospitalization and multiple incidence hospitalization respectively.
Bajaj Allianz Extra Care policy and Bajaj Allianz Extra Care Plus Policy can be purchased on Finserv MARKETS, enabling you to avail benefits like a floater cover for the family on a single health insurance premium payment, emergency ambulance charges coverage, cashless claim facility, health claim by direct click (CDC), and a maternity expenses cover. Another major highlight of these Bajaj Allianz top-up policies available on Finserv MARKETS is the lowest waiting period of one year for pre-existing diseases. Most importantly, with Bajaj Allianz top-up plans you can avail tax deduction under section 80 D of the Indian Income Tax Act.
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