If you have a car, you certainly know the risk of driving the vehicle without a Stepney. Similarly, top-up health insurance policy is like a Stepney to your health insurance policy after you exhaust the coverage. A regular Mediclaim policy covers hospital bills up to the sum insured, while a top-up plan covers cost once you have crossed the threshold limit.
In simple words, when you are hospitalized, the health insurer would pay up to the sum insured only. The top-up, on the other hand, will kick in only when you have crossed the certain threshold limit. The insurer will pay for, over and above the threshold limit. Indeed, top-up health insurance policy is highly useful for those people who have a current individual plan or corporate health insurance policy. It helps in covering those expenses which arise out of a single illness beyond the threshold limit.
Working on the top-up health insurance plan
To clearly understand the working of top-up health insurance policies, let’s take an example of a top-up plan which comes with a sum insured of Rs 10 lakh and a deductible of Rs 5 lakh.
Suppose Mr. Rahul is hospitalized and he has a normal Mediclaim policy cover of Rs 5 lakh. Due to the seriousness of the ailment, the medical expenses go above Rs 5 lakh and end up somewhere at Rs 8 lakh. The additional expense of Rs 3 lakh would then be required to be met from other sources, most probably Rahul would dig into his savings.
However, when you have a top-up health insurance cover, it is feasible to meet this additional requirement. When we say, that a top-up health insurance of Rs 10 lakh cover has a deductible of Rs 5 lakh, then it means, any bill amounts up to Rs 5 lakh would be met by the normal health insurance policy and any amount beyond that limit would be settled by the top-up cover. In the above case, the additional expenses of Rs 3 lakh would be met with a top-up health insurance plan.
Here, it is important to note; top-up health insurance policies offer coverage only when the threshold limit or deductible is crossed. In the insurance field, the deductible is the amount that a policyholder has to pay at the time of claim before the insurer settles the remaining bill. Therefore, if Rahul’s total medical expenses are Rs 6 lakh, the top-up health insurance policy will offer coverage. In case, the medical expenses are below Rs 5 lakh; the top-up health insurance company will not offer coverage.
The top-up health insurance policy can be purchased from the insurer other than from whom you have purchased the normal health cover. Further, it is feasible to claim both your Mediclaim policy and top-up health insurance for single hospitalization, provided both the criteria are met.
The first criterion is that the threshold limit of the top-up health insurance plan is crossed, and the second criteria are that a top-up health insurance policy works only on the single incidence of hospitalization.
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It means you would be allowed to use top-up health insurance policy only if your medical bills are more than the deductible limit during a single hospitalization by a single-family member. In case, where relapse happens within 45 days of discharge from the hospital, it would be counted as a single illness. However, in case, the policyholder is hospitalized for the same illness after 45 days, it would be counted as a fresh case. It means the deductible has to be crossed for every single disease to get benefits under the top-up health insurance policy.
So, how do you choose the best top-up health insurance policy?
Though higher the deductible lower would be your premium, it is necessary to stay away from choosing the top-up health insurance policy on the basis of a premium only. Make sure to compare all the features and benefits offered by different top-up health insurance policies before choosing the one policy.
SecureNow, an eminent insurance advisor, can also help you find the right top-up health insurance policy. You would only need to fill basic details about your requirements, and SecureNow would generate policy quotes that you can compare to find the best top-up health insurance policy.
Remember, the purpose of buying top-up health insurance is not to duplicate the cover, but expand your health cover at a reasonable cost. So, think diligently, act wisely!