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TOP-UP POLICY / SUPER TOP UP POLICY?





As the insurance sector is growing day by day new benefits policies are getting launched. One such kind of policy is Top-up Policy/ Super top up policy.

It is the type of product which provides additional cover to the individual/family according to his need for a nominal premium. It works as an additional coverage over and above your basic coverage of medical insurance. As this amount will be used when your basic coverage or deductible limit is crossed.

In a layman language Suppose Mr A is willing to take medical Insurance for self/family floater for a sum assured of INR 20Lac but the premium for the same is quite high as per his budget. Under this situation, a person has a choice to take a comprehensive policy of particular sum assured. Example INR 5 lac and take another top-up plan for 20 lac with a deductible of INR 5 lac.

DEDUCTIBLE

The deductible is the limit set by the individual for which claim will not be made by him if the medical expenses are within that limit.

In a layman language deductible (under top-up policy/super top up policy) is that amount for which claim will not be given. But anything above the deductible amount can be claimed under top-up insurance. In above Example if Mr A gets hospitalised and the hospitalisation cost came up INR 7 lac then he would claim INR 5 lac from comprehensive policy and INR 2 lac would be claimed from a top-up insurance policy.

WHAT ARE THE TYPES OF TOP UP PLAN?

  • Normal top up Policy

Normal top up policy is one in which the hospitalisation expenses can be claimed only when the cost of single hospitalisation crossed the deductible amount. Example- If Mr A gets himself covered for a comprehensive policy of INR 5 lac & a top-up policy of INR 20 lac with 5 Lac deductible. Mr A gets hospitalised and hospitalisation expenses areINR 4 lac, then 4 lac will be claimed from the comprehensive policy. Again due to same reason he gets hospitalised and expenses came to INR 3 lac then 1 lac can be claimed from comprehensive policy But remaining 2lac cannot be claimed through top-up policy  reason being under Normal Top-up policy claim can only be made only if the cost of single hospitalisation crosses the deductible crossed by the individual.

  • Super top up Policy

Under Super top up policy hospitalisation expenses can be claimed from the company even if the deductible amount is crossed after more than 1 hospitalisation.

Example- If Mr A got hospitalised 3 times in a year resulting in a bill of INR 2lac, 4 lac & 5 lac respectively. Then 1st hospitalisation cost will be Bourne by comprehensive insurance. 2nd hospitalisation cost was 4 lac so 3 lac will be given by comprehensive policy (5lac-2lac) & remaining 1 lac will be claimed from the super top up policy. & third hospitalisation cost will be completely bear under super top insurance plan

WHY IS PREMIUM COST LOW?

Reason due to which the premium for Top-up & super top up policy is low is because a Deductible amount is chosen by individual/family. And, the hospitalisation expenses up to that amount will not be Bourne by the company. Thus, the chances are less that claims will be made. This is the reason due to which premium cost is low for Top-up & super top-up policy.

WHAT ARE THE FEATURES OF A TOP-UP PLAN?

  • Premium cost of a Top-up/ Super Top-up policy is lower as compared to Comprehensive policy
  • Top-up/ Super Top-up policy is available as Individual plan as well as family floater plan
  • Few companies have the option of converting super top up plan to comprehensive plan with 0 deductible on a 6th anniversary or when u r 55 or 60 years if you are 50 years old customer.
  • This means the policy can be converted into a normal comprehensive health insurance policy i.e. the claim can be made starting for INR 1
  • Some companies do not have Waiting period while some have 30 days waiting period
  • It covers inpatient treatment, Pre and post hospitalisation, Domiciliary treatment&Day care procedure as per company rules

WHAT IS THE ELIGIBILITY CRITERIA?

  • Age group to take Top-up / Super top-up Insurance cover is 91 days to 65 years
  • Insurance premium is paid annually
  • The policy can be renewed lifelong
  • Portability option is available
  • If somebody is willing to take the policy at or after 45 years of age then Medical check-up is mandatory




WHAT ARE THE EXCLUSIONS?

  • Waiting period of 30 days covers except any accidental injury, although there is company like Max health insurance which provides medical cover from day 1
  • Any Pre-existing diseases/conditions will not be covered from day 1. Those diseases can be covered if the company has some waiting period clause
  • 2 years exclusion for specific diseases like cataract, hernia, hysterectomy, joint replacement etc.
  • HIV or AIDS
  • Non-allopathic treatment
  • Mental disorder
  • Cosmetic surgery or weight control treatments

TAX BENEFIT

The tax benefit is provided under Section 80(d). Limit for tax benefit is as follows:

  • If individual takes Cancer insurance policy for self then the amount paid as premium will be treated as saving up to INR 25000, but if you are a senior citizen then the rebate is INR 30000
  • Also, if you take this policy for your parents then you can take rebate of INR 25000. However, if your parents are senior citizen then limit of the rebate is INR 30000 separately

However, if the policy is taken for yourself and your parents who are senior citizens then total maximum rebate available under this section is INR 55000.

LIST OF COMPANIES

  • Apollo Munich Health Insurance
  • HDFC Ergo
  • ICICI
  • Max Bupa Health Insurance
  • Star health

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