Understanding Top-Up Health Insurance plans in India

Combating health cost today is one of the toughest challenge people are facing . In a situation when uneven lifestyle ,bad eating habits etc are becoming a common phenomenon leading to regular medical requirements and which is further supplemented by a higher health care inflation compared to regular inflation the need for effective amount of health insurance cover is becoming very important. Few years back an amount Rs.3 lac of health cover was enough for a family of four but considering current situation you would be called underinsured. But this additional health insurance cover requirement comes with an extra cost and can always be a burden for lot of people and that is where top up health cover becomes an effective solution.

What is a top up health insurance?

When you already have an existing cover and the same is inadequate looking at the current context so to get  an extra cover you can look for below given options:

a)Buying a new policy from scratch may be from a new insurer

b)Buying just a top up plan from the existing insurer.

But let us now understand how the two options are different so that you can get a better clarity about top up plans. When you buy a top up plan there is always a concept of deductible. A deductible can be defined as the amount of claim until which your top Health insurance plan would not give you a settlement but if the claim amount of exceeds that particular amount then your top up plan become liable to cover that cost. Take for example, your base health cover is Rs.3 lacs and you have opted for an additional top up Rs.4 lac. In case you raise a claim of Rs.5 lac then first you base policy would cover the initial Rs.3 lac and the remaining of the Rs.2 lac would be covered by the top up plan. Because of the concept of deductible the premium cost of any top up plan is always lower than the buying a new health policy.

Things you should look in a top up health insurance plan:

Though top up is a much cheaper option and reduces premium burden from you but you should have a clear understanding of the amount of deductible. Claims under deductible also come with various limitations which should be kept in mind. It is always recommended to have a top up cover equivalent of the cover of your base policy. Other than this you should have a clear understanding that in case multiple hospitalizations top cover are not very effective.

So in terms of having a proper planned approach right amount of health insurance cover and also keeping cost of premium low one should always have the right mix of base and top plans.