What Is Top-Up In a Health Insurance Policy?

Medical costs are rising daily, and the importance of addressing health issues has also increased. Therefore, having a comprehensive health insurance plan is extremely important during this time. However, considering the circumstances, even the basic health plan might fail to cover all your medical expenses.

This is when a top-up health policy comes into the picture. This plan provides an extra layer of protection and covers expenses your basic plan might not cover. In this blog, we will break down each detail of the top-up health insurance policy for a better understanding. 

Understanding Top-Up Health Insurance

A top-up health insurance policy is an additional coverage that provides financial assistance in case of medical expenses not covered by a basic health plan. In other words, this top-up insurance comes into effect once the threshold limit is crossed. This plan is crafted to complement your existing basic health insurance policy.

For instance, Mr Verma has a health insurance policy with a sum insured of Rs 5 lakh; somehow, his medical bill comes to Rs 7 Lakh. In this case, his top-up plan will cover the additional Rs 2 lakh, after he pays the deductible from his basic plan. 

It’s one of the cost-effective ways to improve your existing health insurance coverage without increasing your premium. 

Benefits of Top-Up Health Insurance

Here are the benefits of a top-up health insurance policy: 

1. Extended Financial Protection: The top-up health insurance plan increases your coverage beyond the fundamental limits of your basic health insurance policy. This means you have added financial safety in case of excessive medical expenses beyond your basic coverage.
2. Higher Coverage at Lower Premiums: Top-up plans are more cost-effective and better than increasing the base sum of your basic policy. Choosing a top-up plan can increase your coverage at a lower premium compared to purchasing a higher premium amount in the basic plan. 
3. No Restrictions: Unlike basic health policies, top-up plans have no coverage restrictions. This means you have more flexibility and freedom in choosing the coverage amount and using it according to your needs.
4. Easy to Convert: If required, health top-up plans can be easily converted into whole primary health insurance policies. This provides flexibility and continuity of coverage without the inconvenience of medical screenings.

1. No Pre-Policy Screening Required: Top-up plans do not require any pre-medical screening, making it easier for everyone regardless of their health issues. This simplifies the process and ensures quicker initiation. 
2. Tax Benefits: Premiums paid for top-up health plans are potentially eligible for tax deductions under section 80D of the Income Tax Act. This allows policyholders to take advantage of tax benefits on the premiums paid, which can reduce their taxable income. 
3. Complements Existing Policies: It complements existing health policies by providing additional coverage and ensuring safety at all levels.  
4. Useful for Medical Emergencies: The top-up plan is handy when your basic plan is completely exhausted. 

Who Should Consider a Top-Up Plan?

Every policyholder should consider buying the best health insurance top-up in addition to their current one. This is more useful for senior citizens because the older the person gets, the higher the health insurance premium. Having top-up health insurance can significantly reduce the premium.

When Does the Coverage Activate?

Top-up health insurance coverage gets activated once the sum insured by the basic health insurance policy has been exhausted, and the medical costs exceed a specified deductible amount. You can choose a deductible amount during the top-up policy purchase. 

What is Covered in a Top-Up Health Insurance Plan?

A top-up health insurance policy covers a wide range of medical costs. Here are some of the key inclusions:

1. Inpatient Hospitalisation: It covers expenses related to hospitalisation, including room costs, nursing charges, and doctor’s fees.
2. Pre and Post-Hospitalisation Expenses: This covers the costs before and after hospitalisation, usually up to a designated number of days.
3. Daycare Procedures: Treatments requiring less than 24 hours of hospital stay are also covered under the top-up plan.
4. Ambulance Charges: The top-up plan also covers the expenses for availing of an ambulance during a medical emergency.
5. Domiciliary Treatment: The medical treatments taken at home are also covered under top-up plans.

How to Select a Top-Up Health Insurance Plan?

Here are a few factors that you should consider when you buy health insurance top-up plans:

1. Deductible amount
2. Premium cost
3. Waiting period
4. Policy exclusions
5. Coverage limits 

Apart from these factors, it’s recommended to consider your healthcare needs, financial capacity, and risk tolerance while selecting the plan to ensure enough coverage at an affordable cost.