What is a top up and super top up health insurance policy?

super top up Policy

The healthcare cost (hospitalization) is constantly increasing year on year and when we try to buy a health insurance the premiums are also rising day by day due to increase in claim value.  How do we effectively manage our health insurance premium? In this blog post let’s discuss in detail about Top up policy and super top-up policy that helps to manage health insurance premium efficiently.

Also read, How to buy a Health insurance plan in India?

Top up health insurance policy

A Top up health insurance policy is a policy that helps you to cover your medical expenses beyond a limit called deductible in a single occurrence. Usually, the deductible limit is set as the limit of you base policy (Regular health insurance policy). Let us see some examples that help you to understand how a top-up health insurance policy works.

Example 1: Rajesh has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. Rajesh gets hospitalized due to an accident and the total expenses come around 2 Lakhs rupees. In this case, Rajesh can only use his base policy because the top-up policy has 3 lakhs deductible. Which means top-up policy won’t provide any claim up to 3 Lakhs rupees. So he pays his bill through base policy and top-up policy was of no use.

Example 2: Kumar has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. Kumar gets hospitalized due to an accident and the total expenses come around 2 Lakhs rupees, he pays for it through his base policy. Now his base policy limit is 1 Lakh till the end of the policy period. After 2 months Kumar gets hospitalized due to a cardiac arrest and his treatment cost comes around 3 Lakhs rupees. Here, he pays 1 Lakhs from his base policy and remaining 2 Lakhs rupees from his pockets as there is a deductible limit of 3 lakhs per occurrence in his top up policy.

Example 3: Shiva has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. Shiva gets hospitalized due to an accident and the total expenses come around 2 Lakhs rupees he pays for it through his base policy. Now his base policy limit is 1 Lakh till the end of the policy period. After 2 months Shiva gets hospitalized due to a cardiac arrest and his treatment cost comes around 6 Lakhs rupees. Here he pays 1 Lakhs from his base policy, 2 Lakhs rupees from his pockets as there is a deductible limit of 3 lakhs per occurrence in his top up policy and remaining 3 Lakhs is paid from the top up policy.

Example 4: Ragu has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. He gets hospitalized and the total bill amount comes to 7 Lakhs rupees. Here the base policy would pay 3 lakhs rupees and top up policy would pay the remaining 4 Lakhs rupees.

Super top-up health insurance policy

A Top up health insurance policy is a policy that helps you to cover your medical expenses beyond a limit called deductible in a policy period.

Using the same 4 example scenarios from the top-up policy for the better understanding of super top-up policy.

Example 1: Rajesh has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a  super top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. Rajesh gets hospitalized due to an accident and the total expenses come around 2 Lakhs rupees. In this case, Rajesh can only use his base policy because the super top-up policy has 3 lakhs deductible. Which means super top-up policy won’t provide any claim up to 3 Lakhs rupees. So he pays his bill through base policy and super top-up policy was of no use.

Example 2: Kumar has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a super top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. Kumar gets hospitalized due to an accident and the total expenses come around 2 Lakhs rupees he pays for it through his base policy. Now his base policy limit is 1 Lakh till the end of the policy period. After 2 months Kumar gets hospitalized due to a cardiac arrest and his treatment cost comes around 3 Lakhs rupees. Here he pays 1 Lakhs from his base policy and remaining 2 Lakhs rupees is paid by super top-up policy.

Example 3: Shiva has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a super top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. Shiva gets hospitalized due to an accident and the total expenses come around 2 Lakhs rupees he pays for it through his base policy. Now his base policy limit is 1 Lakh till the end of the policy period. After 2 months Shiva gets hospitalized due to a cardiac arrest and his treatment cost comes around 6  Lakhs rupees. Here he pays 1 Lakhs from his base policy and remaining 5 Lakhs is paid from the super top-up policy.

Example 4: Ragu has a base policy (Regular health insurance policy) of limit 3 lakhs. He buys a super top-up policy with 10 lakhs limit and a Deductible of 3 Lakhs. He gets hospitalized and the total bill amount comes to 7 Lakhs rupees. Here the base policy would pay 3 lakhs rupees and super top-up policy would pay the remaining 4 Lakhs rupees

The main difference between top up and super top-up policy is that in top-up policy the policy comes into effect only when a single hospital bill exceeds deductible amount and only the exceeded amount is paid whereas in super top-up policy the super top-up policy comes into effect even when the deductible limit is exhausted in multiple occurrences or claims.

Still, have doubts?  Let me clarify few questions.

Can I use a top up or super top-up policy with the base limit of employer-provided health insurance plan?

Ans: Yes you can.

Should I purchase base policy and top up/super top-up policy from the same insurance company?

Ans: No, they can be bought from separate insurance providers. However, my suggestion is to buy it from the same insurer. If you have the policies from 2 insurers the claim process may not be as easy as the one from the same insurer.

Can I buy top up/super top-up policy for senior citizens?

Ans: Yes but all insurance companies may not have a plan for senior citizens.

Can I claim tax exemption for super top-up policy/top-up policy?

Ans: You can claim tax exemption under section 80 D.

Can I convert my top up/super top-up policy to a regular policy later during renewal?

Ans: Yes, certain insurance companies allow you to convert a top-up policy/super top-up policy to a regular policy after 1 year. However please read the scheme related documents before you buy.

If you have more questions please ask in the comments section will add them here and answer it for you.

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Tags: Top up health insurance policy, Super top-up health insurance policy

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