How does top-up health insurance work?
As mentioned above, top-up health plans offer additional coverage beyond the threshold limit of an existing health insurance policy to policyholders. For example, an individual has an existing health insurance policy with coverage up to Rs. 3 lakh. They can purchase a top-up policy with coverage up to Rs. 5 lakh. If the individual incurs medical expenses of Rs. 4 lakh in a year, their primary policy will cover up to Rs. 3 lakh and the top-up policy will cover the remaining Rs. 1 lakh.
Read more: Super Top-up Health Insurance
Key benefits of top-up health insurance plans
Here are some key benefits of top-up health insurance plans that help you enhance coverage without increasing premiums significantly.
In-patient hospitalisation treatment coverage
Get coverage on charges incurred during hospitalisation for treatments, tests, or other medical procedures. It includes the medical expenses, but the room rent capping depends on the insurance provider.
Pre-and post-hospitalisation coverage
You may incur a few medical expenses before hospital admission and after discharge. These include diagnostics tests, such as angiograms, X-rays, MRIs. Also, medication needed before and after hospitalisation. Top-up health insurance covers these charges up to 60 days before and 90 days after hospitalisation. The duration may differ from insurer to insurer.
Organ donor expenses coverage
Donors feel reluctant to come forward as they must cover their medical expenses. With a top-up health insurance plan, you can steer clear of this major deterrent. It covers the surgical and medical costs associated with harvesting a critical organ transplant of the insured.
Emergency ambulance coverage
You no longer have to pay for emergency ambulance charges if your health insurance does not cover it. With a top-up plan, you get the sum insured as per the insurance purchased.
Affordable premiums
Top-up health insurance offers additional coverage at a much lower cost than regular health insurance.
No restrictions on coverage limits
Unlike basic health insurance, top-up insurance has no restrictions on coverage limits. This means that you can choose the amount of coverage you require based on your individual needs. Top-up health plans usually do not have sub-limits or restrictions on hospitalisation expenses like room rent, or doctor fees, etc.
Easily convertible
You can easily convert top-up health insurance into a regular health insurance policy if and when required.
High coverage at an affordable premium
Get additional coverage over and above your health insurance policy. Top-up health insurance plans come with higher coverage at affordable premiums.
Tax benefit
Get tax rebate for the premium paid towards the top-up health insurance policy. You can file for tax exemption under the relevant sections of the Income Tax Act.
Covers pre-existing illnesses
Many top-up health insurance plans cover pre-existing diseases. Usually, you get to benefit from the coverage after a waiting period. Most insurers apply a waiting period of 2 to 4 years on the pre-existing diseases. During this period, you cannot claim for the benefits if you undergo any treatment for the pre-existing illness. The conditions vary from insurer to insurer.
What are the types of top-up health insurance plans?
You get top-up health insurance in two forms. One, a simple top-up health plan and another, a super top-up health plan. Both these types work as a booster to your primary health insurance plan. You can use these plans to pay the additional medical expenses if your regular health plan gets exhausted.
How is top-up insurance different from a basic health insurance plan?
Categories
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Basic Health Insurance
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Top-up Health Insurance
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Meaning
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Covers incurred medical expenses up to the sum insured limit from day one.
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Provides medical coverage only after the base health insurance sum insured is exhausted.
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Mandatory Deductible
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No mandatory deductible applies.
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Comes with a mandatory deductible on every claim.
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Policy Activation
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Activated from day one of the policy, including accidental claims.
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Activated after your base policy is exhausted and you pay the deductible.
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Premiums
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Premiums are higher compared to top-up plans.
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Premiums are lower since the deductible reduces insurer liability.
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Pre-medical Screening
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Medical check-ups usually mandatory after age 45.
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Generally not required until age 50.
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Sub-limits
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Sub-limits may apply (e.g., room rent, procedures).
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Typically, no sub-limits apply.
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Important Note: Do not confuse a top-up plan with health insurance riders. Riders such as personal accident cover, hospital cash allowance, or critical illness cover apply to specific conditions and can only be purchased along with a base health insurance policy. In contrast, a top-up plan can be bought independently, whether or not you already hold a base policy.
