Top-up v/s super top-up health insurance policy

Top-up v/s super top-up health insurance policy

Purchasing a health insurance policy is one of the best decisions you can make for yourself and your family’s financial security. However, while getting a health insurance plan, you should be careful while choosing your sum insured as it is vital to have an adequate sum insured to be wholly protected.

The amount of sum insured plays an important role in your health insurance. It should be no less as you have to compromise with the quality of the treatment or have to pay from your own pockets in case of some medical emergencies. You should also not opt for coverage that is more than your financial requirements, else, you will end up paying a higher premium.

At times, there can be situations where you might feel your sum insured is not sufficient or have exhausted by raising single or multiple claims in a year. In such situations, top-up plans like a basic top-up plan or a super top-up health insurance plan can come to your rescue. Health insurance companies offer these plans so that you don’t have to compromise on your health coverage amount.

However, when it comes to buying a top-up plan confusion is always there regarding what is a top-up or a super top-up plan. Let us understand the difference between these two plans.
Top-up coverage offers coverage beyond a particular limit. So, in top-up insurance, if 5 lakhs are deductible, the top-up policy will begin paying after 5 lakhs, i.e., when a particular maximum has been reached.

For example, if a company offers 7 lakhs cover as a group health policy to its employees, the employee can normally purchase a top-up plan with a 7 lakhs deductible because the group policy will pay the initial claim amount up to 7 lakhs.

There are two types of top-up plans available. The first is a basic top-up plan, while the second is a super top-up plan.

Basic top-up plan

When you purchase a basic top-up plan, the deductible is applied on a per-hospitalization or per-claim basis in a year, i.e., the plan will cover a single claim that exceeds the deductible amount. In other words, the deductible is applied to each health insurance claim. Therefore, if any of your first, second, third, or subsequent hospitalization expenses do not reach the deductible limit within a year, the top-up plan will not be activated and will not support you in settling your claim.

Super top-up plan

Once the deductible is met, a super top-up plan pays the entire hospitalization expenses. In other words, this plan becomes active for subsequent claims when the total admissible claims exceed the deductible limit. The deductible is applied to the total amount of eligible claims in a year.

Suppose, you have both a super top-up plan and a basic top-up plan with a maximum sum insured of 10 lakhs (assuming a 5 lakhs deductible). Two claims emerge in a year, the first for 2 lakhs and the second for 4 lakhs. The basic top-up plan would not assist in settling both claims because your health claims did not surpass the deductible limit of 5 lakhs in either case. In the case of a super top-up plan, however, the sum of both admissible claims will be considered for the deductible, and so the second claim of 1 lakh (claim of 2 lakhs + claim of 4 lakhs) – (5 lakhs deductible) will be paid out to you.

Which should you choose: Top-up or super top-up?

If you do not have a chronic condition or are facing a terminal sickness, a top-up health insurance plan will suffice. This is because, unless you are really unfortunate, finding yourself in a couple of life-threatening situations in a year is rare.

However, if you are likely to be hospitalized multiple times a year due to chronic medical conditions, you may consider purchasing super top-up insurance coverage. The premium you will pay is low in comparison to the money you may save on hospitalization expenses.

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