Top up vs Super Top up in Health Insurance
Having a health insurance policy is not enough unless you do not have a sufficient level of Sum Insured. Medical costs are rising steadily and given the costs of treating common ailments, having sufficient health insurance coverage is important. However, one cannot ignore the high premium costs of affording such a high coverage level. Choosing a higher Sum Insured also involves paying a higher premium. For many middle-class men, this is a double sword on which they have to walk. On one sharp side, it is the unaffordable medical treatments. If they want to protect themselves from such costs, the other side presents unaffordable health insurance premiums. Is there a solution?Actually, there is. Ever heard of a top-up or a super top-up health insurance plan?
Top-up and super top-up health plans help you in affording a high coverage limit. These plans supplement your health insurance coverage without being hard on your pockets. Want to know what these plans are?
Top-up health insurance plans: Top-up health insurance plans have two important factors. They have a Sum Insured and a corresponding deductible limit. If any claim exceeds the deductible limit, a top-up plan pays the excess claim.Here is an example. A top-up plan is taken where the Sum Insured is Rs.10 lakhs. The corresponding deductible limit is Rs.5 lakhs. If a claim of Rs.4 lakhs is incurred, the top-up plan would pay no benefit as the claim is below the deductible limit. If, a claim of Rs.6 lakhs is incurred, the top-up plan would pay Rs.1 lakh as claim. Thus, a top-up plan would become effective if any claim exceeds the deductible limit of Rs.5 lakhs.
Super top-up health insurance plans: Super top-up health insurance plans are a step up from top-up health insurance plans. Under a super top-up plan, the aggregate claims incurred in one policy year are matched against the deductible limit. If the aggregate claims exceed the deductible limit, the excess claim is paid under the plan.Let’s take the above example itself. Suppose the plan is taken on 1st January and in March, a claim of Rs.2 lakhs is incurred. No claim would be payable under a top-up or a super top-up plan. In June, another claim of Rs.2 lakhs is incurred. Again, no claim would be paid under both the top-up and super top-up plans. In November, another claim of Rs.4 lakhs is incurred. In case of a top-up plan, no claim would be payable as the claim of Rs.4 lakhs is below the deductible limit of Rs.5 lakhs. However, in case of super top-up plans, the aggregate claims are looked at. In the year, two claims have already been made of Rs.2 lakhs each. In case of the third claim, the aggregate claim amount becomes (2+2+4) Rs.8 lakhs. This amount exceeds the deductible limit by Rs.3 lakhs. A super top-up policy would, thus, pay Rs.3 lakhs as claim. Differences between the two: The difference between a super top-up plan and a top-up plan is apparent. While the former aggregates the total claims in one policy year, the latter considers each claim as an isolated incident. Due to this difference, the premiums of a super top-up plan are higher than premiums of a top-up plan.
Which one is better? Needless to say, a super top-up plan is a better alternative as it increases your chances of getting a claim under the plan. Though the premiums are a tad bit higher, you cannot ignore the better coverage offered by super top-up plans. How to choose a top-up or a super top-up plan? Though both the plans are good, you should remember that these plans should not be taken as standalone health insurance plans. The main objective of these plans is to provide supplemental coverage with ‘supplemental’ being the operative word. Before buying a top-up plan or a super top-up one, you should assess your existing health plan. If you don’t have a health insurance plan, buy one before buying a top-up or super top-up plan. The deductible under these plans should coincide with the Sum Insured of your normal health plan. This would give you an ideal scenario. If any claim exceeds the deductible limit which would not be paid by your normal health plan (as it exceeds the Sum Insured), the top-up or super top-up plan would come to your rescue and pay the claim. Ideal, isn’t it?
Top-up and super top-up plans enhance your coverage without pinching your pockets and are, thus, a blessing. You should have optimal coverage and if you can’t afford the higher premiums, buy a top-up or a super top-up plan and enhance your coverage by as much as you like.