Consider this scenario: Did you buy a health insurance cover of Rs. 3 – 5 lakhs for your family a few years back? At that time, the cover amount would have been adequate, but not today. Consider another scenario: Your employer provides you a health insurance cover of Rs. 3 – 5 lakhs for your family, or you are covered for a similar amount under a State Government health insurance scheme. 

In all the above scenarios, considering the current and future expected medical inflation, the cover amount will not be adequate. In such a scenario, you can enhance your health insurance coverage with a top-up or a super top-up health insurance policy.

What is a top-up health insurance policy?

A top-up health insurance policy pays only when the claim amount exceeds a specified amount. The specified amount is known as a deductible. For example, you have bought a top-up health insurance policy with a sum insured of Rs. 10 lakhs and a deductible of Rs. 5 lakhs. In this case, the top-up policy will pay only whenever the claim amount exceeds Rs. 5 lakhs. Consider the following scenarios for claim payment.

Scenario 1: The claim amount is Rs. 4 lakhs. The top-up policy will not pay any amount as the claim amount of Rs. 4 lakhs is lower than the deductible amount of Rs. 5 lakhs.

Scenario 2: The claim amount is Rs. 6 lakhs. The top-up policy will pay Rs. 1 lakh (Claim amount Rs. 6 lakhs – Deductible amount Rs. 5 lakhs). In the same year, if there is another claim of Rs. 3 lakhs, the top-up policy will not pay anything as the claim amount is lower than the deductible of Rs. 5 lakhs.

At the start of the article, we saw some scenarios where the health insurance coverage amount is not adequate. In such a scenario, you can buy a top-up health insurance plan. You can keep the personal health insurance / corporate health insurance / Government health insurance sum insured amount as the deductible threshold.

For example, you have an existing health insurance policy with a Rs. 5 lakhs sum insured. You want to enhance your coverage to Rs. 20 lakhs. In this case, you can buy a top-up plan with a Rs. 20 lakh sum insured and a Rs. 5 lakh deductible.

In the case of a top-up policy, every claim during the year should be higher than the deductible amount for the claim to be paid. What if you have already exhausted your personal health insurance cover, and the subsequent claim is lower than the deductible? In such a scenario, the top-up policy will not pay. Here, a super top-up health insurance plan can come to your rescue.

What is a super top-up health insurance policy?

A super top-up policy is similar to a top-up policy. However, there is one significant difference. In a top-up policy, every claim should be higher than the deductible amount for it to be paid. But in a super top-up policy, the aggregate of all claims in a year is considered. If the aggregate of all claims in a year exceeds the deductible, the claim will be paid.

For example, you have bought a super top-up health insurance policy with a sum insured of Rs. 10 lakhs and a deductible of Rs. 5 lakhs. In this case, the super top-up policy will be paid when the aggregate of claim amounts during the year is higher than Rs. 5 lakhs. Consider the following scenarios for claim payment.

The claim amount is Rs. 6 lakhs. The super top-up policy will pay Rs. 1 lakh (Claim amount Rs. 6 lakhs – Deductible amount Rs. 5 lakhs). In the same year, if there is another claim of Rs. 3 lakhs, the super top-up policy will pay the claim as the aggregate of the 2 claim amounts (Rs. 6 lakhs + Rs. 3 lakhs) in the year is higher than the deductible of Rs. 5 lakhs.

Please note in the above example, if you would have bought a top-up policy instead of a super top-up policy, the second claim will not be paid as the claim amount (Rs. 3 lakhs) is lower than the deductible amount (Rs. 5 lakhs).

Thus, a super top-up plan is beneficial if an individual is suffering from an illness that requires hospitalisation multiple times in a year.

How to enhance your health insurance coverage?

At the start of the article, we saw some scenarios wherein your health insurance coverage may have become inadequate. In such a scenario, instead of buying a new health insurance policy with a higher sum insured, you can buy a top-up / super top-up policy. You can choose your base health insurance policy sum insured amount as the deductible amount for your top-up / super top-up policy. Thus, a top-up or super top-up policy can help you enhance your existing health insurance coverage in a cost-effective manner.