A top-up insurance plan within group health insurance covers hospitalization costs but only after a threshold limit is crossed. This threshold limit is known as deductible i.e portion of the claim amount that is not covered by the insurer and has to be paid by the policyholder. Once the claim amount crosses the deductible limit, the top-up policy kicks in and covers claim cost up to the sum limit of the policy.
For example – If the top-up policy sum insured is INR 10L and deductible is INR 2L then the top-up policy will kick in only if the claim amount is > 2L. Suppose the claim amount is INR 15L. Here the top-up policy will cover the claim cost of INR 10L above the deductible limit i.e. INR 2L and the policyholder will bear the claim expenses under 2L. Insurers know that claims > 2L are rare, hence they offer a top-up policy at a lower premium making it a cost-effective way to increase health insurance coverage.
The deductible limit of a top-up policy is supplemented by the base health insurance policy. For example – Suppose you take a top-up policy with a deductible of INR 2L. You should take a base health insurance policy of sum insured INR 2L. In this way, you can use your base health insurance policy to make a claim up to the deductible amount rather than bearing the cost of it.
Most employers offer group health insurance benefits to their employees. However, it is commonly seen that employers do not offer a high sum insured limits in the group insurance cover to keep premium cost under budget. To compensate for lower sum insureds they often offer choice to the employee to increase his/her cover through top-ups. Multiple top-up limits (typically 3-5) are offered to the employees to choose from. A sample group health insurance program with top-up options is illustrated below –
|Designation||Base Sum Insured||Top-Up Options||Deductible||Total Sum Insured|
|AVP, VP & Above||10L||10L||10L||20L|
|Asst. Manager, Manager & Sr. Manager||5L||5L||5L||10L|
|Jr. Associate, Associate & Sr. Associate||3L||2L||3L||5L|