What is a Top-Up Health Insurance Plan and How Does It Work?

What Are Super Top-Up Health Insurance Plans?

A super top-up health insurance plan is an add-on policy that gives you financial coverage beyond the base insurance coverage. It is a deductible insurance plan, meaning it requires a deductible—a predefined amount that must be paid either from your pockets or via an existing policy, before the super top-up coverage kicks in.

Unlike a regular top-up policy which does not cover expenses in excess of the deductible in a single claim, a health insurance super top-up plan aggregates the total medical expenses in a policy year. The super top-up policy starts to apply only when the combined cost of all claims exceeds the deductible.

How Do Super Top-Up Plans Work?

To maximise super top-up plans, you need to understand how they work. Here's a step-by-step explanation:

1. Deductible Threshold

Deductible is a feature of every Health insurance super top-up policy. This is the amount you will pay before the insurance company starts to pay for your expenses. Either you use your existing health policy to meet the deductible or make out-of-pocket payments.

2. Cumulative Claim Coverage

Super top-up plans unlike regular top-up policies apply deductible on total medical expenses incurred during a policy year. Then, once the aggregated cost of all treatment above a minimum cost called the deductible is exceeded, the policy covers the expenses post that.

3. Policy Benefits

After the deductible is met, the super top-up plan covers hospitalisation, day-care, pre and post-hospitalisation expenses and other medical expenses as per the policy terms.

4. Flexibility in Deductibles

Flexible deductible options are provided with these plans to enable policyholders to fine-tune their coverage, based on their existing health insurance or financial capability. Lower premiums usually go in hand with higher deductibles.

5. Coverage Areas

Typically, super top-up plans cover expenses related to hospitalisation, pre and post-hospitalisation, daycare treatments and other medical bills as per the terms of the insurer.

The benefits of Super Top-Up Health Insurance

With so many advantages, a super top-up health insurance plan is a cost-effective method to supplement your health coverage. Here are some key benefits of super top-up health insurance:

1. Low Cost Enhanced Coverage

The coverage limits provided by super top-up plans are much higher than the premium you pay when compared to increasing the sum insured of your base policy. For example, you have an existing policy of ₹10 lakhs and instead of upgrading it to ₹20 lakhs, you could add a super top-up plan with a deductible of ₹5 lakhs, saving you big time on premiums.

2. Customisable Deductibles

These plans are particularly useful for dealing with high-cost treatments like surgeries, long-term hospitalisation or treatment for chronic diseases that might exceed your base policy’s sum insured.

3. Multiple Claims Coverage

Super top-up plans allow you to top up multiple claims in a year, unlike top-up policies. As a result, they are a good option for people who have regular ongoing medical bills or those looking for all-inclusive coverage for the whole family.

4. It’s also ideal for supplementing employer-provided insurance

Many employees depend on group health insurance from their employers. However, those plans usually come with only limited coverage. Super top-up plans are a supplement to ensure that there is enough protection, without replacing the current cover.

5. Customisable Deductibles

You can pick a deductible depending on your financial capability or your current policy coverage. The premium is lower if your deductible is higher, and that means you are in control of costs.

6. Coverage for Diverse Needs

Maternity benefits, coverage for critical illnesses and pre-existing conditions after a waiting period, subject to the insurer, are also included in super top-up plans.

Super top-up vs top-up insurance: What’s the Difference?

Top-up and super top-up health insurance plans are designed to increase the benefits of your base health insurance. However, there are major differences between them. Here’s a detailed comparison:

Key Differences:

Deductible Application
●    Top-Up Insurance: To be applied on each claim separately.
●    Super Top-Up Insurance: When applied on an aggregate basis to claims made during the policy year.
Claim Flexibility
●    Top-Up Insurance: Best used in single high-value claims.
●    Super Top-Up Insurance: Applicable for several claims that in the aggregate are above the stated deductible.
Coverage
●    Top-Up Insurance: Refers to cases that are beyond the scope of the deductible per event.
●    Super Top-Up Insurance: It covers multiple claims at different times in the year.
Premium
●    Top-Up Insurance: Slightly lower premiums.
●    Super Top-Up Insurance: The super top-up insurance premiums are slightly high because of the coverage that is offered.
Best For
●    Top-Up Insurance: Recommended for people expecting one major claim that they will make.
●    Super Top-Up Insurance: Suitable for those people who may have a chance to have several claims within one year.

Example:

Let’s assume a deductible of ₹5 lakhs with medical expenses of ₹3 lakhs incurred three times during the year:
●    Under a Top-Up Plan: Since no one claim is more than ₹5 lakhs, there will be no payout.
●    Under a Super Top-Up Plan: The total cost of ₹9 lakhs will initiate the coverage, which shall provide the coverage over and above the first ₹5 lakhs.
Super top-up plans are better suited to give more financial cover since it is expected that one will have to make more than one claim within a year.