Top Up and Restore features enhance your covers at very low incremental costs

There are two types of medical insurances which have significant advantages. They help to enhance your cover without scrapping your older policies and without costing too much. The first of this type is also called a top up policy. Suppose you have a policy which covers your family for about 5 Lakhs. You have had this policy for many years and now it covers all the pre-existing diseases and there are no exclusions. Such a policy is a valuable policy and you would not want to discontinue it. Yet, because of spiraling medical care costs you want to enhance your cover. This is where the top up policy comes in handy. In a top up policy you buy an additional cover of a certain sum with an excess of 5 Lakhs. Excess means that this new policy will not cover the first 5 Lakhs of your hospitalization bills (this is ok with you since your existing policy provides for the first 5 Lakhs anyways). All expenses beyond 5Lakhs, up to the sum insured is covered by the new top up policy. 

An example of a top up policy is Extra Care from Bajaj Allianz. It gives three different covers – 10Lakhs with an excess of 3 lakhs, 12Lakhs with an excess of 4 lakhs, and 15 Lakhs with an excess of 5 lakhs. Star Health is another company with a top up offering. There are others too.

A policy with an excess is a lot cheaper than a policy without an excess. As mentioned earlier, taking a new policy and scrapping the old one entails sacrificing the first year exclusions and the 4 year exclusion of a pre-existing disease. Existing policy supplemented with a top up policy is a happy marriage of two policies, one complementing the other, and is light on your pockets.

Another concept introduced recently is the restore feature. Apollo Munich came up with a product Optima Restore and Star Health has followed suit with a restore feature. In Optima restore, the restore feature implies that if your policy cover is exhausted during the middle of the coverage period, the sum insured is fully restored. For example, if you have a cover of 3 Lakhs and 6 months into the policy you have exhausted it, the 3 Lakhs are restored for the remaining 6 months. Mathematically, it is same as having another top up policy of 3 Lakhs combined with the original policy. Apollo already had a product Easy Health. By simply combining the Easy Health feature with a top up of the same amount, it is able to offer the Restore feature. The premiums of Optima Restore are just about 20% higher than the premiums for Easy Health. Of course, the top up is not the only add on for this extra 20%. Optima Restore also has another killer feature – for a claim free year it rewards the customer by enhancing the sum insured by 50% on policy renewal, and after two successive claim free years the buyer finds that his sum insured has doubled.

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