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A top-up plan works on a per claim basis. (iStockphoto)
A top-up plan works on a per claim basis. (iStockphoto)

Exceeded your health insurance limit? With top-up plan avoid paying from pocket

  • Top-up plan works on a per claim basis, while the super top-up plan is applicable only after the base amount of the health plan exhausts.
  • Buying a top-up plan is more cost effective than increasing the base amount of your health plan: Gaurav Mashruwala

Even if you have health insurance, it might not be enough!

In multiple cases, people have to pay from their pockets to clear hospital bills as they exceed the base amount of their health insurance. However, a simple way to avoid this is buying a top-up plan along with a health plan. In case you exceed the base amount of your health insurance, you can claim the rest from the top-up plan.

There are two kinds of top-up plans

Top-up plan: A top-up plan works on a per claim basis. That is, you can claim from the top-up only after you have exhausted your health insurance claim amount for a particular claim.

Super top-up plan: Now for super top-up plan, there is no threshold limit on per claim basis; it is applicable only after you have exceeded the total amount.

For example, let's assume you have a 2 lakh health policy and a 3 lakh top up plan. In a particular year, you make three claims of 50,000, 2 lakh and 3 lakh. So in these cases, the first claim will be covered by the health insurance. For the second claim of 2 lakh, your health plan will cover 1.5 lakh, and you can get the rest from the top-up. And you would have to bear the entire expenses for your third claim.

Now, if you have a 3 lakh super top-up policy along with your 2 lakh mediclaim, then in the first two cases, you will get the same benefit as a top-up plan. Plus for the third one, you can claim 2.5 lakh from the super-top plan. And pay the rest, i.e. 50,000, from your pocket.

So, in case of senior citizens or critical/chronic illnesses, when the chances of multiple claims are higher, it makes more sense to buy a super top-up plan, said Gaurav Mashruwala, Sebi-registered investment advisor.

Why buying a top-up plan is more beneficial than increasing the base amount for your health insurance plan?

"First of all, buying a top-up plan is simply more cost-effective than increasing the base amount for your health plan." Mashruwala added.

On average, the yearly premium amount for a top-up plan is 1,000 for every 1 lakh cover. In comparison, for a 30 to 35-year-old individual, the premium amount for a basic 3 lakh health plan would be around 6,000 per year.

Second, if you wish to increase the base amount of your health insurance plan then there is a yearly limit to it, which is determined by the insurer. Top-up plans don't come with such conditions.

"Like an investment portfolio, one should also have a health insurance portfolio too. And it is always more beneficial to have more than one product in that, like a base insurance plan and also a top-up plan," Mashruwala concludes.













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