Super top-up policy for medical emergency

It’s a more cost-effective option vis-à-vis increasing the sum assured in basic policy

Shiv Kumar, 31, a Noida-based tech professional, had a medical insurance cover worth ~200,000 from his employer. A few months ago, he had to be hospitalised because of an accident. The cost of treatment came to around ~300,000. And Kumar had to shell out the balance ~100,000.

Owing to high medical inflation, corporate covers often prove insufficient in case of a major disease or accident. Hence, employees should buy more cover on their own, over and above that provided by their employer. Depending on your requirement, you may opt for either a basic health plan, a top-up plan or a super top-up plan. Top-ups and super top-ups are available for both individual and family floater options. “In a corporate medical insurance cover, some policies also impose conditions such as co-payments and other restrictions. Topups and super top-ups very well serve the purpose of supplementing or complementing an employer's group health policy,” says Shreeraj Deshpande, head-health insurance, Future Generali India Insurance.

A top-up cover comes into play after you have exhausted the sum insured on your primary policy. You need to choose a deductible for your top-up policy — the amount that you will have to pay out of your pocket, or which your basic policy will pay for. The top-up policy will only pay for an amount above the deductible limit.

Super top-up plans offer a better deal than top-up plans. A top-up plan gets activated only when a single claim amount exceeds the deductible amount. Suppose that you have a top-up cover with a deductible of ~200,000. You fall ill twice during that year, and each time your hospitalisation bill comes to ~150,000. In such a scenario, your top-up plan will not get activated. If the hospital were to present you with a single bill of ~225,000, then your top-up plan would get activated, and you would be reimbursed for ~25,000. You can take care of this lacuna in a top-up policy by opting for a super top-up plan. With this plan, even if you were to get two separate bills of ~150,000 (so that the total during a year comes to ~300,000), the super top-up policy would reimburse you for ~100,000.

A top-up plan has limited cover for pre- and post-hospitalisation expenses. But super topup plans provide coverage of pre- and posthospitalisation expenses, day care procedures, and pre-existing diseases after a waiting period of three years, just like basic insurance plans.

To opt for a super top-up plan, you do not need to have a basic health insurance policy. You can pay the deductible amount out of your pocket.

Enhancing the cover of your existing policy is another option, but an expensive one. “Premiums of top-up and super top-up plans are much lower than those of basic health covers since they come with higher deductibility, and hence insurance companies consider them to be less risky,” says Anand Roy, executive director and chief marketing officer, Star Health and Allied Insurance. For a 40-year-old, HDFC's Health Suraksha, a basic insurance plan, with a sum insured of ~750,000 charges a yearly premium of ~9,172. On the other hand, HDFC's super top-up plan with a sum insured of ~700,000, and having a deductible of ~300,000 charges a yearly premium of ~2,207. When buying a super top-up plan, you need to undergo a medical check-up only if you are above 55. “People who are about to enter the senior citizen category and have a limited sum insured in their basic medical insurance policy should opt for super top-up plans to get higher protection,” says Rakesh Jain, executive director and CEO, Reliance General Insurance. Premiums paid for super top-up plans are eligible for income tax deduction under Section 80D.