“As a spare tire is to a car, a top-up cover is to a health insurance policy.”One morning, I got a call from one of my clients, working at a call center. He sounded very desperate, and wanted me to clarify his doubts on health insurance. Very desperately, he said, “See, my wife has a health insurance policy with sum insured of Rs.3 lakh, and she has been hospitalized due to a major accident. Medical expenses for treatment are going to come up to Rs.8 lakh but her health insurance company is paying Rs.3 lakh as the sum insured limit is Rs.3 lakh only. What should I do?” I replied, “Hasn’t she taken any top-up cover?” He said, “No,” and I replied, “Now there is no way out. You will have to shell out the amount over and above the sum insured from your own pocket.” “I just wish she had taken a top-up cover!” With the advent of globalization, the world is changing, technology is advancing, and health care costs are rising. In this age of rising inflation, wherein healthcare costs are rising at the rate of 18% - 20% each year, we have to be sure when we buy health insurance it is enough to take care of our healthcare and medical expenses. Or else we end up paying medical bills from our own pocket, just the way my client had to shell out Rs5 lakh, even after having a health insurance policy. Opting for a health insurance policy with a sum insured of Rs.3 lakh is not enough these days, considering the rising cost of healthcare. It is fine as long as the illness or disease is a minor one. But what if it is a major one? Are you financially so sound that you can pay the medicals bills that are over and above your budget? If your answer is “no,” and you are worried about rising health care costs, don’t worry. A top-up health insurance cover is a solution for your problems. What are Top-up Health Covers? A top-up or add-on cover is a policy that provides additional cover over your existing health insurance policy. A normal health insurance plan will reimburse medical bills up to the specified sum insured taken by the person, but a top-up plan covers the costs of your medicals bills even after a certain threshold is reached. For example: If you are taking Extra Care Plan, which is a top-up cover plan from Bajaj Allianz, you would pay a premium as low as Rs.2500 for a wider cover of Rs.10 lakh sum insured, wherein Rs.3 lakh will be deductible. This simply means that this policy is triggered only if the claim amount is more than the deductible, i.e. over Rs.3 lakh. So if the claim is less than Rs.3 lakh, the top-up plan will not kick in. However, if the claim is more than that, let us say Rs.4 lakh, the top-up policy will kick in, and the amount over and above the deductible will be paid by the insurance company, thus giving you financial security and freedom. Based on the example given above, we can conclude that a top-up cover is very important. This can be highlighted by the following points:
- A top-up plan is a smart way to enhance your health cover, without increasing your health insurance costs. You get a wider coverage for a lower premium.
- It takes care of the rising cost of healthcare expenses.
- It can also be taken on a standalone basis, keeping the deductible in consideration.
- It can be taken by the corporate employees, already covered under group health cover by their company for an extended and adequate cover.
- It comes with a floater cover with the single premium for the family, so you can get a cover for yourself and your family under this plan.
- You can also enjoy tax benefits under section 80D of the Income Tax Act, 1961. The premiums payable under this plan are tax exempted.