A top-up health insurance policy is a supplement health insurance that helps policy holder increase the insurance coverage keeping health insurance premium at affordable level. It helps the insurance policy holder in bringing down the policy premium for higher health insurance coverage. However, if we go by the investment experts’ view, one should look minutely at the deductible limit and sum insured before buying a top-up health plan.
Advising top-up health insurance policy buyers to remain vigilant about deductible limit and sum insured Pankaj Mathpal, MD at Optima Money Managers said, “One needs to remain extra vigilant about the deductible limit and the sum insured while buying a top-up health insurance plan because there are two types of top-up health plans available — deductible limit applicable once in a financial year and deductible limit applicable every time the health claim is made.”
Mathpal said that top-up health insurance policies can be classified into two categories — top-up and super top-up. In top-up plans, the insurance company pays for the bill going beyond the deductible limit. For example, if a top plan has ₹1 lakh deductible limit, in that case up to ₹1 lakh bill has to be paid by the policy holder while the payment above ₹1 lakh will be paid by the insurance company. He said that if a person has taken super top-up plan, then the deductible limit won’t get applied after it has been applied once in a year while in the case of top-up plan, it would be applied every time the claim is raised. For example, if a policy holder has submitted two bill of ₹1.5 lakh and ₹1 lakh bill in single financial year and its deductible limit is same ₹1 lakh. Then, in the case of super top plan, the policy holder will be given ₹50,000 relief on first occasion while on the second occasion; he or she will be given entire ₹1 lakh amount of the bill as the deductible limit is applied once in a year. But, in the case of top-up plan, relief will be only ₹50,000 on first occasion as there is no payment up to ₹1 lakh deductible limit.
Advising insurance policy holder to buy both base health insurance and super top-up health policy Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, “One should have both base health insurance policy and super top-up health insurance plan. It helps policy holder to pay the deductible limit from the base health insurance plan. But, in case the bill goes beyond the sum insured in the base health plan, then one can use the super top-up plan to pay the extra amount by using deductible limit benefit.”