“Top-up” plan – A must have By Beena Doshi
A top-up plan is a regular health insurance policy that covers hospitalisation costs , but only after a threshold limit ( known as deductible) is crossed. A deductible is that portion of the claim amount that is not covered by the insurer and has to be paid by the policyholder before the benefits of the top-up policy can kick in.
A top-up plan, therefore, is a cost-effective way to increase your health insurance cover. You can take a base policy and a top-up over and above that policy. This way you can use your base health insurance policy to make a claim up till the deductible amount and use your top-up plan for any payments over that.
The deductible feature of a top-up plan makes it cheaper because it reduces the liability of the insurance company.
But ensure the deductible is not more than the sum insured you have taken in the base policy. So, suppose you have a health insurance policy with a sum insured of ₹ 3 lakh, make sure the deductible in your top-up plan is not more than ₹ 3 lakh.
This way if there is a claim of say more than ₹ 3 lakh, you can use both your base policy and top up pan to pay your bills.
Super top-up plans are similar to top-up plans, except that top-up plan covers a single claim above the threshold limit, while the super top-up plan covers the total of all hospitalization bills above the threshold limit.
Points to note :-
1. Choose the policy after examining if expenses for day-care procedures, pre-existing diseases, pre and post-hospitalisation expenses are covered or not.
2. Many insurance providers prescribe medical tests only for those above 45 years of age. However, this can vary across insurance companies.
3. Top-up policies are eligible for income tax benefit for premium paid under Section 80D of the Income Tax Act. Do go through the wordings of the health insurance plans carefully before choosing a company to stick to. Understand the points related to pre-existing diseases, coverage undertaken, what constitutes as hospitalization and medical expenses, pre and post hospitalization expenses, and the likes.
