Top-up health insurance

A top-up health insurance plan is an add-on service to your existing health policy that provides extra security to you and your family in case of a medical emergency.

Understand with an example - Suppose you have taken health insurance of three lakhs initially, but seeing the increasing age and increasing cost of health-related facilities, you have started to realize that your health insurance plan will not be enough for a medical emergency in the future. In such a situation, a lot of people think of taking a separate health policy or upgrading their existing health plan. Instead, you can take a top-up plan that may enhance your cover as well as reduce your financial risks. A top-up plan usually has a very low premium as compared to a new health insurance policy. 

It is important to know that you will be able to benefit from a top-up policy only after you have already spent a base amount as per the terms and conditions of the policy. This amount could be from your own pocket or from a health insurance policy. However, taking a top-up policy over and above the sum insured of a health insurance policy is more beneficial to ensure that you are better covered for your health needs.

(Read more: Which is the best health insurance)

Although a top-up plan can be taken by any person, it is most beneficial for the following people:

Low sum insured

In a developing country like India, a lot of people don’t have enough budget for high premium policies. So, they have to opt for plans with less coverage. In such situations, a person can consider taking a top-up plan. A top-up plan gives extra coverage at affordable rates.

Corporate employee

Most corporate companies provide a health insurance plan to their employees. However, an employee who is not satisfied with the sum insured provided by their company can consider a top-up plan for extra cover. 

Senior citizens

Senior citizens tend to be at a higher risk for several chronic and acute conditions. Sometimes, health problems increase so much that the facilities provided by a health policy are not enough to manage them and the person has to pay out of their own pocket if the bills exceed the sum insured amount. In such a situation, add-on plans can save you from 'paying extra'.

(Read more: What does health insurance cover)

Following are some of the features of top-up health insurance plans:

Maternity cover

In many cases, top-up health insurance covers pregnancy. However, there is usually some waiting period for this, i.e. only after you have waited for the time specified by the insurance company, will you be able to take advantage of maternity cover.

(Read more: What does health insurance not cover)

More profit for less premium

A top-up plan is cheaper than a regular medical insurance policy. Let us understand this by example, if you have taken health insurance of Rs 5 lakh from a health insurance company, then you must be paying some premium for this. Now let's say you pay a premium of Rs 6,500. Now, if you add a top-up plan of Rs 15 lakh to this, then you may have to pay an added amount of around Rs 5,000, which is much cheaper than if you get a new or additional policy of the same amount.

(Read more: Which is the cheapest health insurance)

Available as a floater plan

Top-up health insurance can be taken for one person or as a floater plan. In a floater plan, the entire family is covered. So, there is no need to take separate policies for each member of the family. The best part is that you will have to deposit only one premium (instead of individual ones for each member) and all the members of your family will be able to benefit from the entire sum insured. For example, in a floater plan of 25 lakhs, one member can avail the full amount in case of an emergency or each member will be covered as long as the medical bill is within the sum insured.

(Read more: What is Family Floater Health Insurance)

No document required

You don’t necessarily have to buy your primary health policy and top-up health insurance from the same company. Another health insurance company may offer you various discounts for selling its top-up plan to you.

(Read more: Which is the best health insurance company and policy)

However, if you take a top-up plan from the same company from which you had taken the primary health insurance, you will not be asked for documents, as they will already have your required documents. If you take a plan from another company, then you may be asked for the following documents -

• 10th or 12th mark sheet
• Driving license
• Birth certificate
• Pan Card
• Aadhar Card
• Electricity Bill, Telephone Bill, Ration Card
• Passport or Voter ID, Passport size photograph

The waiting period is short

One of the best features of top-up health insurance is it has a short waiting period for pre-existing diseases. Some companies even cut the waiting period up to 12 months.

Tax saving benefits

Like all health insurance plans, a top-up insurance plan also gives you the benefit of tax exemption on the premium. As per Section 80D of the Income Tax Act, you can get a maximum exemption of up to Rs 25,000 on a top-up plan. This discount is applicable for insurance plans purchased for self, spouse and children. If you are above 60 years of age, you can enjoy a higher deductible limit of up to Rs 50,000.

Health cover against pre-existing disease

Most health plans do not provide coverage in case of a pre-existing disease. However, If you already have specific diseases like diabetes or high BP, you can supplement your standard insurance plan with top-up health insurance, which will provide you coverage for the disease.

Other features of top-up health insurance

Here are some other features of top-up health insurance that you should know:

• A top-up health insurance plan can be easily converted into a basic health insurance plan.
• There is no upper limit on the cost of hospitalization like doctor's fees, room rent etc.
• You may be given a 'Free Look Period' for the next few days from the date of purchase of the policy to better understand the terms and conditions of the policy. During this period, you can also return the policy if you wish to.
• You may be able to get a lifetime renewal facility under a top-up health insurance plan.
• The policy term can be of 1 year or 2 years or it may change depending on the rules of the insurance company. 

There are two ways to make a claim:

Cashless claim

For a cashless claim, visit the insurance desk in the network hospital. They will ask you to fill a form and show the required documents like your health card and ID. The hospital will send your form along with medical records to the insurance company by fax or any other means. The latter will verify the form and other documents to check if you are eligible for the claim. Once approved, the company will pay all your medical bills as per the terms and conditions of your policy.

(Read more: Best cashless mediclaim policy in India)

Reimbursement

Reimbursements are helpful in case of emergency when you don’t have enough time to go through all the procedures needed for a cashless claim or get admitted to a network hospital of your insurance company. 

In such a situation, if you are undergoing treatment in a non-network hospital, inform your insurance company about getting admitted and complete the treatment process, paying all the medical expenses from your pocket. 

Once the emergency is over, you can apply for reimbursement. When the patient is being discharged, make sure to keep all the necessary documents and bills related to the hospital and submit them to your insurance company. You can also apply online if you want. After assessing and verifying the documents, the insurance company will credit the claim amount to your bank account as per the terms and conditions of your policy.

Note: The abovementioned steps may differ from company to company.

(Read more: Critical illness insurance)

While taking top-up health insurance or regular health insurance, you should keep the following things in mind:

Give correct information

Be it regular health insurance or top-up health insurance, you must give accurate information about your health to the insurer. The insurance company can reject your claim in case of concealment of a medical condition or tampered documents.

Check the reliability

Before taking top-up health insurance, you must know about the credibility of the company. For this, you can check customer reviews and ratings on the Internet or personally meet a customer to know more about the company's services. 

Apart from this, you must also review the settlement ratio of the company. An unsatisfactory customer can be a clear indication of an inefficient customer care staff.

Don't forget to compare

As mentioned above, you can take top-up health insurance from your primary health insurance company or from another company. But before you decide to take a top-up plan, make sure to compare the plans from various companies. This will not only help you get the most out of your top-up plan but also ensure that the plan fits in your budget. 

You can easily check the top-up plans of insurance companies on any comparing website (a lot of websites offer these services). 

(Read more: myUpchar Bima plus policy)

Take care of renewal

Insurance companies usually give a few days' relaxation to the policyholder for renewing their top-up health insurance policy. However, if you don’t renew your policy before the grace period is over, then the policy may lapse and you will not get any benefit from it. Most companies remind their customers about renewal. 

(Read more: Why mediclaim policy is better than medical loan)