Why Go for a Top Up Health Insurance Plan

Let’s understand it with an example-

Karan, a 30-year-old pre-sales manager met with a life-threatening accident and got severely injured. Luckily, his employee medical insurance covered most of his treatment costs but not all. Just like us, Karan thought a cover of 4 Lakh is more than enough for his medical treatment but he did not have any idea of the accident that could land him in debt. Using his savings seemed like the last option for him because the health cover could bear a cost of only Rs. 4 Lakh and not the total cost of Rs.6 Lakh. Had he purchased a top-up health insurance plan, he wouldn’t have to part away with his savings and put his future plans in jeopardy. A top up would have offered him an extended cover of Rs. 2 Lakh at nominal cost, helping him deal with the elevated treatment costs or cover the differential amount.

How do Top-up plans function?

Top up plans follow a cost-sharing model and are functional in situations where the insured has to bear the treatment cost that exceeds the deductible limit of assured limit. When your medical expenses reach the cover limit, your insurer stops taking into account your elevated treatment cost and this is when the top up plan comes into the picture by helping the insured deal with the expenses that cross that threshold limit.

Sum insured offer by various insurers falls in the range of Rs. 50,000 - Rs. 15,00,000 and the deductible amount ranges between Rs. 30,000 – Rs. 5,00,000 respectively. Excluding the deductible amount covered by a general health insurance policy, top up plans provide full protection under the sum insured.

Advantages of Top-up plans

Top up plans are cheaper in comparison to general health insurance policies if the deductible is higher.
Buying a top-up plan is a better option than extending a basic health cover at a nominal cost.
Easy to purchase, these plans can be bought from any insurer without restrictions. The basic health insurance policy and a top-up plan can be of two different companies.
Top ups are available along with family floater cover and an individual
These plans offer tax deduction under section 80D.

It is recommended to purchase a good health insurance plan that covers hospitalization and treatment costs. And if in case the threshold limits are touched, opting for an ideal top-up plan is the best option to cope up with the elevated treatment costs.