Health Insurance has become a must for everyone with the changing lifestyle and new arising health problems. With the increasing costs of the hospitals it is becoming difficult to bear the costs if there is some serious illness. Many people thinks that the only option to overcome the situation is to buy an additional health insurance policy. But there is a better option available for the customers and that is Top-Up Health Insurance Plan. The plan will help you to get higher claims with lower premiums.
Let us take an example and understand how the complete procedure goes. What are the pros and cons and how it will benefit you if you take a top-up health insurance plan rather than another policy.
Say for an example, you want to buy a health insurance policy of around Rs. 5 lacs. Now, you have to pay an annual premium of around Rs. 25,000 to 30,000. And at the same time if you look for another option, you can buy a health insurance for Rs. 2 lacs. You have to pay an annual premium of around Rs. 13,000 to 15,000. Now you can get a top-up for Rs. 5 lacs and pay an annual premium of around Rs. 5,000 only. Here, the top up can be claimed only if the threshold limit of the base policy has been crossed. The top up of Rs. 5 lacs insurance means there you can claim maximum upto Rs. 3 lacs from top-up if the deductible limit is Rs. 2 lacs.
From insurance company point of view it is beneficial as they upper side claims are triggered very less. So, it is beneficial for the company. And the customers are attracted due to lower premiums.
Claims in different situations
Case 1: If there is a claim of Rs. 4.5 lacs, first 2 lacs will be paid by base medical insurance and the rest Rs. 2.5 lacs will be paid by top-up insurance.
Case 2: If there is a claim of Rs. 6 lacs, first 2 lacs will be paid by base medical insurance and the rest Rs. 3 lacs will be paid by top-up insurance. The insurance company is not responsible for the rest.
Case 3: If there is a claim of Rs. 2 lacs and Rs. 1.5 lacs for two times of medical treatment, the top-up insurance does not come into existence. It can be claimed only for one time treatment.
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The top-up health insurance policy can be bought from a different company as that of the base medical insurance company. Just the deductible limit is to be specified and accordingly top-up limit is defined. The top-up plan is available for both individual as well as floater policies.
Note: In case of floater policy, it is similar to case three. The combination of expenses of medical treatment of individuals will not be taken into consideration but the single bill of one individual can be claimed.
Advantages of Top-Up Health Insurance Plans:
- The annual premium to be paid is very less as compared to the one or different multiple medical insurance policies.
- The top-up plan is very beneficial for employees who buys the base medical policy under companies scheme and needs to extend the limit.
- Income tax benefits under Section 80 D can also be claimed on the premium paid.
- The medical check-up is for age group below 55 years which is 45 years is normal medical insurance.
Disadvantages of Top-Up Health Insurance Plans:
- It can be claimed only for one medical treatment even if the combined expenses of two treatments is more than the threshold limit. Though if the patient is hospitalized again within 45 days, that comes under single medical treatment.
Terms and Conditions to be taken care of:
- The treatments for which it is applicable.
- Whether the pre and post hospitalization charges are included.
- The terms and conditions for base and top-up plans may differ specially if they are from different issuer.
You can also opt for Super Top-Up Plans. Generally, this policy includes the claim for all the types of medical treatment. But the annual premium to be paid is much more than normal top-up.