EXPLAINED: How top-up health insurance plans give you more coverage at a lesser premium

Top-up health insurance policies are those that help an insured person to get coverage beyond the base policy. Most importantly, if the investor buys a top plan, its premiums are much lesser than the regular base health plan. However, according to investment experts, there are some technical angles that one must look at while buying a top-up health plan, especially the deductible limit and sum insured.

Speaking on the factors to look at while buying a top up health plan Pankaj Mathpal, Managing Director at Optima Money Managers said, "While buying a top up health plan, one needs to look at the deductible limit and how it is applied very carefully. There are top up health policies that apply deductible limits once in a financial year while some of the companies offering top up health insurance apply deductible clauses every time the claim is raised." Mathpal advised buyers to go for the super top up plans that apply deductible clauses once in a policy year.

On the basis of deductible limit clauses there are two types of top up plans — top up and super top us. The top up health plans come with a sum insured and a deductible limit. When the claims exceed the deductible limit, the excess claim is paid by the insurance company. If the deductible limit is Rs 2 lakh, then in that case up to Rs 2 lakh has to be paid by the insurance holder while rest of the money has to be paid by the insurance companies. In case of a top up plan, insurance companies won't pay till one's medical bill doesn't go beyond Rs 2 lakh. But, in the case of super top up health plans, if one has availed a claim once in a year then the deductible limit won't get applied in the next claim in the same financial year. In that case, the entire bill has to be paid by the health insurance company.

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Suggesting investors to buy both base health plan and super top up plan Manikaran Singhal, Founder at goodmoneying.com said, "If one has a regular base health plan then the deductible limit will be taken care by the base health plan while super top up plan will take care of the bill beyond deductible limit."

Asking investors to buy both base plan and super top up plan from the same company; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "It's better to get both base health plan and super top up plan from the same company. It helps documentation simply and most importantly, if the hospital is on the panel of the base plan, it will be on the panel of the super top up plan too. Having two plans from two companies not only makes documentation a difficult task, there is double checking whether the hospital is on the panel of both insurance companies or not."