What Is Top-Up Health Insurance and How Does It Work?

A medical emergency can bring unexpected financial stress, even when you have a health insurance plan in place. Often, the hospitalisation bills exceed the coverage amount of a standard health insurance policy, leaving the policyholder to pay the additional costs out-of-pocket. This is where a top-up health insurance plan comes into play. It acts as a safety net by offering additional coverage over and above the sum insured of your existing health insurance policy, ensuring you are well-prepared for any medical contingencies.

What are Top-up Health Insurance Plans?

A top-up health insurance policy is an add-on coverage that comes into effect once the threshold limit, known as the deductible, is crossed. This plan is designed to supplement your existing health insurance policy by providing an additional layer of financial protection. For instance, if you have a health insurance policy with a sum insured of ₹ 3 lakh and a medical bill of ₹ 5 lakh, your top-up plan will cover the additional ₹ 2 lakh, after you pay the deductible amount from your base policy. It’s a cost-effective way to enhance your health insurance coverage without significantly increasing your premium. For example, Mr. A has a health insurance policy of INR 3 lakhs. He pays a premium amount of INR 6000 annually. But he feels that the coverage won’t be enough. Accordingly, if he increases the existing health insurance policy coverage from INR 3 lakhs to INR 5 lakhs, the premium amount would be INR 10,000. But instead, he opts for a top-up health insurance plan, which has a premium of INR 1000 for every 1 lakhs top-up. Therefore for an extra 2 lakhs cover, he pays INR 2000 additional that it is INR 8,000 annually.

What are the Types of Top-Up Health Insurance Plans?

If the policyholder's medical emergency claims are more than the health insurance policy plan covered, then the policyholder can claim the extra amount from the top-up plan. There are two types of plans — top-up and super top-up.

1. Top-up plan

Applicable per year per claim basis and works when the claim amount is more than the current health insurance policy's coverage amount.

2. Super top-up plan

Applicable when due to the repeated claims in a year, the policyholder exhausts the cover of the health insurance plans.

CLAIM	MR. A — HEALTH INSURANCE OF INR 3 LAKHS + TOP-UP PLAN OF INR 5 LAKHS	MR. B—– HEALTH INSURANCE OF INR 3 LAKHS + SUPER TOP-UP PLAN OF INR 5 LAKHS
Claim 1 — INR 3 Lakhs	Covered by the health insurance	Covered by the health insurance
Claim 2 — INR 1 Lakh	Policyholders need to pay the entire amount because the top-up plan will only cover the claim if they exceed the health insurance coverage plan.	The super-top up plan will cover the claim. In case of multiple claims within a year, the super top-up plan pays the extra amount if the policyholder exhausts the health insurance coverage amount.
Claim 3 — INR 4 Lakhs	Only INR 1 Lakh will be covered by the to-up plan, which is the extra amount over the policyholder’s health insurance coverage plan. The policyholder will bear INR 3 Lakh since he already exhausts his health insurance coverage amount in his 1st claim.	The super top-up plan will cover the entire amount.

How Does Top Up Health Insurance Work?

A top-up health insurance plan gets activated only after the current health insurance policy amount gets exhausted. The difference between top-up and super top-up plans is — the top-up plan only covers a single claim above the current health insurance policy. In contrast, the super top-up plan claims for collective medical expenses within a year.

Benefits of Top-Up Health Insurance Plans

Opting for a top-up health insurance plan has several advantages:

1. Increased Coverage at Lower Premiums

A top-up health insurance policy allows you to increase your coverage amount without the need to upgrade your existing health plan, resulting in lower premiums compared to a higher sum insured in a base policy.

2. Affordable Premiums

The premiums for a top-up plan are relatively lower compared to the cost of upgrading the base health insurance policy to a higher sum insured.

3. Comprehensive Protection

Top-up plans cover expenses beyond the deductible limit, providing comprehensive protection against substantial medical bills.

4. Flexibility

You can choose a top-up plan with a deductible amount that suits your financial capacity, giving you the flexibility to manage your health insurance costs effectively.

5. Tax Benefits

Premiums paid towards a top-up health insurance plan are eligible for tax deductions under Section 80D of the Income Tax Act, adding to the financial benefits of this policy.

What is Covered in a Top-Up Health Insurance Plan?

A top-up health insurance policy covers a wide range of medical expenses, just like a regular health insurance plan. Some of the key inclusions are:

1. In-patient Hospitalisation

Covers expenses related to hospitalisation, including room rent, nursing charges, and doctor's fees.

2. Pre and Post-Hospitalisation Expenses

Costs incurred before and after hospitalisation, usually up to a specified number of days, are covered.

3. Daycare Procedures

Treatments that do not require a 24-hour hospital stay are covered under the top-up plan.

4. Ambulance Charges

Expenses for availing an ambulance service during a medical emergency are also included.

5. Domiciliary Treatment

Medical treatments taken at home, under specific conditions, are covered.

How is Top-Up Insurance Different from a Basic Health Insurance Plan?

The primary difference between a basic health insurance plan and a health insurance top-up plan lies in the concept of the deductible. A basic plan covers medical expenses up to the sum insured from the first claim itself. In contrast, a top-up plan kicks in only after the medical bills exceed a predefined deductible amount. Here’s a quick comparison:

Basic Health Insurance Plan	Top-Up Health Insurance Plan
Covers medical expenses from the first claim.	Activates after the deductible limit is crossed.
Higher premiums for higher sum insured.	Lower premiums due to the deductible feature.
Covers single claims up to the sum insured.	Covers expenses beyond the deductible in a single claim.

How to Select a Top-Up Health Insurance Plan?

Choosing the right top-up health insurance plan involves considering several factors:

1. Determine Your Deductible

Decide on a deductible amount based on your existing health insurance coverage and your ability to pay out-of-pocket in case of a claim.

2. Evaluate Your Health Needs

Consider your current health condition and family medical history to choose the appropriate coverage amount.

3. Check the Premiums

Compare the premiums of various top-up plans and choose the one that offers the best value for your needs.

4. Look for Flexibility

Choose a plan that offers flexibility in terms of coverage and add-on features.

5. Consider the Insurer’s Reputation

Opt for a plan from a reputed insurance company like Bajaj Allianz General Insurance Company, known for its customer service and hassle-free claim settlement process.

Things to Keep in Mind While Purchasing a Top-Up Plan

When purchasing a top-up health insurance policy, consider the following aspects:

1. Understand the Deductible Clause

The deductible is the most crucial part of a top-up plan. Ensure that you understand how it works and choose an amount that aligns with your financial capacity.

2. Co-Payment Clause

Check if there is a co-payment clause in the plan, where you need to share a certain percentage of the claim amount.

3. Waiting Period

Some top-up plans come with a waiting period for pre-existing diseases. Make sure you know the waiting period applicable to your policy.

4. Exclusions

Understand the exclusions under the top-up plan to avoid any surprises during claim settlement.

5. Coverage Scope

Ensure that the coverage offered by the top-up plan is adequate for your needs, including hospitalisation and post-hospitalisation expenses.

Inclusions and Exclusions of Top-Up Health Insurance Plans

Inclusions

• Hospitalisation costs exceeding the deductible.
• Costs of specific treatments and surgeries.
• Expenses related to accidents and critical illnesses.

Exclusions

• Pre-existing diseases until the waiting period is over.
• Treatments related to self-inflicted injuries or substance abuse.
• Cosmetic surgeries and non-allopathic treatments.

How to Apply for Online Top-Up Health Insurance Plans

Applying for a top-up health insurance policy online is a simple process:

1. Visit the Insurer’s Website: Go to the official website of a reputed insurer like Bajaj Allianz General Insurance Company.
2. Select the Plan: Choose the top-up plan that best suits your needs and budget.
3. Fill in the Details: Provide personal details, existing health policy information, and select the deductible amount.
4. Upload Documents: Upload necessary documents such as identity proof, address proof, and health records if required.
5. Make the Payment: Pay the premium amount through secure online payment options.
6. Receive the Policy: After successful verification, the policy document will be sent to your registered email ID.

Conclusion

A top-up health insurance plan acts as a bridge-whist between healthcare policy and the medical emergency expenses. It is enhancing the health insurance limit at a reduced cost. Top-up health insurance is a good option for policyholders who have a family floater plan or have a history of medical ailments.

FAQ’s

1. What is top up health insurance? Why does one need to avail the plan?

At the time the policyholder thinks that their current health insurance plan won’t be enough to cover medical or health care needs, the policyholder can buy a top-up health insurance plan to increase the coverage amount. Top-up health insurance is a cost-effective plan to ensure the policyholder is covered for life’s uncertainties.

2. What is top up in health insurance? Who should buy the plan?

Top-ups in health insurance often confuse the extra benefits provider such as — hospital cash, personal accident insurance, etc. But, the top-up is actually a policy that provides the same benefits as a regular health insurance plan. Every policyholder should buy the top-up health insurance plans besides their current health insurance base plan. It has more generous senior citizens' coverage because the older the person gets, the health insurance premium also gets higher. Buying top-up health insurance can significantly reduce the premium.

3. How does top up health insurance work?

Both the health insurance policy and top-up health insurance can be claimed together at the same time for a single hospitalization bill. Each insurer is liable to pay the part of the claims.

4. Is top-up health insurance better?

Yes, top-up health insurance is beneficial if you have a basic health plan with a lower sum insured. It offers additional coverage at a lower premium without changing your base policy.

5. Is there a waiting period for a top-up health insurance plan?

Yes, most top-up plans have a waiting period for pre-existing diseases, typically ranging from 1 to 4 years, depending on the insurer.

6. What is a deductible in a top-up plan?

A deductible is the amount you need to pay out-of-pocket before the top-up plan starts covering the expenses. It is a predefined threshold limit that must be exceeded for the top-up plan to activate.

7. Can I buy a top-up insurance plan if I do not have a regular health policy?

No, a top-up plan requires an existing health insurance policy to cover initial expenses up to the deductible limit.

8. How does the claim process work for top-up health insurance?

For claims exceeding the deductible, you first claim from your base health policy. If the bill exceeds the sum insured, you can claim the remaining amount from the top-up plan.

9. What is the minimum deductible amount for top-up health insurance?

The minimum deductible varies by insurer but typically ranges from ₹ 1 lakh to ₹ 5 lakh. Choose a deductible based on your existing health policy coverage.

10. Why are top-up plans cheaper?

Top-up plans are cheaper because they come with a deductible, meaning they only cover expenses above a certain limit, reducing the risk for insurers.

11. Who can purchase a top-up health insurance plan?

Anyone with an existing health insurance policy can buy a top-up plan, especially beneficial for those seeking additional coverage at a lower premium.

12. When do you require a top-up health insurance plan?

You need a top-up plan if your base health insurance has a lower sum insured, and you want additional coverage for emergencies without paying high premiums. *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.