Top-up plans are cheaper than health insurance policies

My wife and I are both in our late 30s, and we don’t have children. My job gives us a family floater policy of ₹ 5 lakh, and a ₹ 3 lakh floater for my parents, both in their mid-70s. The policy allows room rent of a single AC standard room or ₹ 7,000, whichever is lower, and covers pre-existing conditions. My parents also have individual covers of ₹ 2 lakh each, at significant expense. We feel we are under-insured, and wish to buy family floater of about ₹ 15-20 lakh covering all four of us. Is that enough? Will a single policy be good for all of us, or should we take two separate floater policies?—Prateek

The right amount of coverage depends on your lifestyle and medical history. Since the cost of treatment varies substantially by choice of hospital, the sum insured should be appropriately defined. A thumb rule is to take cover equal to annual income.

I recommend taking two separate health insurance policies for the two couples. Given the age difference, the medical needs will be unique. If there are two policies, a claim made by one couple will not affect the no-claim bonus of the other. This independence scores over a discount available to share the complete sum assured.

You could consider buying a top-up health insurance policy instead of a standard mediclaim policy. A top-up policy carries a deductible, which makes it significantly cheaper than a standard mediclaim product. Deductible is the limit up to which the claim amount is being borne by the insured. Within top-up plans, you should select the one that has an annual aggregate deductible rather than the one with a deductible per claim.

I see that some policies allow discounts or additional features on renewal if the policyholder shows enough physical activity on a tracking device that is connected to the insurer’s app. Is this a significant feature to look at? Are these measurements accurate?—Namrata

Insurers are increasingly being innovative in strengthening their product proposition. However, most of these programs are at a nascent stage. If the product and insurer scores well on all other parameters, then you can use this add-on to define preference. However, on a stand-alone basis, these features are not significant to influence your purchase decision.

Also read | India’s best health insurance plans to choose from

Also read | A guide to buying health insurance plan

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Abhishek Bondia is principal officer and managing director, SecureNow.in.

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