Health Insurance: Increasing the sum insured of your basic policy? Opt for these more cost-effective options

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Published: February 23, 2019 12:42:18 PM

Before opting for either of the options, know how these plans differ and what suits you the best

income tax, tax deductions, 80D deductions, health insurance premium, Income Tax Act, health insurance for self and family, health insurance for parents, policyholder, health insurance, health insurance plans, how to choose health insurance, best health insurance plans in India, claim settlement ratio, Individual Vs family floater, top up plans, super top up plans,Depending on one?s requirement, one can either opt for a basic health plan, a top-up plan or a super top-up plan

With the steep rise in medical costs, most often than not low sum assured health insurances policies fail to meet the medical expenses of policyholders. In case of major accidents or diseases, corporate medical insurances also do not cover the entire expense. Hence, experts suggest policyholders with low sum assured and employees depending only on their corporate medical insurances should opt for an additional cover.

Depending on one’s requirement, one can either opt for a basic health plan, a top-up plan or a super top-up plan. If you hold a health insurance policy with a low sum assured, it’s not necessary that you enhance your sum assured, instead you can opt for more cost-effective options like top-up and super top-up covers. They are available for both individual and family floaters.

Before opting for either of the options, know how these plans differ and what suits you the best:

1. Top-ups and super top-ups serve the purpose of complementing and supplementing an existing employer’s group health policy or individual policy. Corporate health insurance cover comes with various limitations and restrictions, such as co-payments, and their coverage also varies from year to year. Experts suggest that opting for a basic health cover and complementing it with a top plan is an ideal way to avoid the rising health care costs and paying from your own pocket.

2. Once you have exhausted the sum insured on your basic health insurance policy, a top-up cover comes into play. For a top-up policy, you need to choose a deductible while buying the policy. Deductibility is the amount that the policyholder pays from their own pocket, or their basic health policy pays for it before the top-up cover activates. Top-up policies only pay for the amount above the deductible limit.

3. Super top-up plans, on the other hand, offer a better deal when compared to top-up plans. A top-up plan will only get activated when a single claim amount exceeds the deductible amount. For instance, your top-up cover has a deductible of Rs 150,000. In a year, you produce two hospitalization bills of Rs 1 lakh and Rs. 120,000. In such a scenario, the top-up plan will not get activated. You would have to produce a single bill of Rs 220,000 to activate your top-up plan, only then you will be reimbursed for the extra Rs 70,000.

4. In case of a super top-up plan, policyholders do not need to face that same problem. With a super top-up plan, two separate bills are considered as one expense. For instance, if you produce two hospitalization bills of Rs 1 lakh and Rs 120,000, a total of Rs 220,000 in a year, the super top-up policy will get activated and will reimburse you for Rs 70,000.

5. Unlike top-up plans, which have limited cover for pre and post-hospitalization expenses, super top-up plans provide coverage for both pre and post-hospitalization expenses, along with pre-existing diseases (with a waiting period) and day care procedures. The premiums paid for super top-up plans are also eligible for income tax deduction u/s 80D.

6. Enhancing your basic policy is an expensive approach as compared to buying a top-up or super top-up plan. The premiums of top-up and super top-up plans are also lower than basic health covers because they come with higher deductibility.

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