In an era of rising hospital costs, relying solely on basic health insurance is no longer sufficient. Treatment costs for serious illnesses can reach lakhs.
Health insurance is not just an option these days, but a necessity. People often secure a family floater plan of $5 lakh or $10 lakh, ensuring they are protected. However, given the rapid rise in hospital costs, especially in large cities where hospitals now resemble five-star facilities, this coverage often proves insufficient.
Serious illnesses like cancer, heart disease, or organ transplants can cost lakhs of rupees in just a few days. In such a situation, relying solely on basic health insurance is sure to cause a financial setback. However, with proper planning, comprehensive health coverage can be obtained at a lower premium. The most effective way is to purchase a top-up or super top-up plan along with basic health insurance. Both claim to offer greater coverage at a lower premium, but their mechanisms differ. This difference determines which option will be best for you.
What is a top-up policy?
Top-up health insurance is a policy that provides additional coverage after your existing health insurance coverage has been exhausted. It has a fixed limit, called a "deductible." The deductible is the fixed amount you must bear before claiming treatment or damages, or that is covered by your basic policy. Only then will the insurance company pay the remaining expenses.
Why is Super Top-up Policy better?
A super top-up policy works similarly to a top-up policy, but its approach is more flexible and beneficial. The deductible in a super top-up policy applies to the total medical expenses incurred throughout the year, not just a single claim. This means that if your basic health cover is exhausted after multiple hospitalizations in a year, all subsequent expenses will be covered by the super top-up policy.
Big benefit in low premium
The biggest advantage of a super top-up is that you can get health coverage of up to $50 lakh or $1 crore for a very low premium. If you simply purchased a basic health plan with such a large premium, its premium would be a huge burden on your pocket. However, if you purchase a basic plan of $5 or $10 lakh and add a super top-up, you can get greater coverage for just $4,000-$5,000 extra annually. This is a very economical and sensible option for a family of four (two adults and two children).
Be careful when choosing your deductible
You can set your own deductible limit. It's best to set a deductible equal to your basic health insurance, so you don't have to pay out-of-pocket costs under any circumstances. For example, if your base plan is $20 lakh and you've set a deductible of $10 lakh in your super top-up, any expenses above $10 lakh will be covered by the super top-up, leaving you with some coverage in your base plan.
There will also be relief in tax
Top-up and super-up health insurance are also tax-deductible under Section 80D of the Income Tax Act. This means that you get the benefit of tax savings along with protection.
How much cover is right to take?
This depends on the city you live in and how expensive treatment for serious illnesses is in major hospitals. For those living in metro cities, total health coverage of $50 lakh to $1 crore is considered practical today.
Where to get Super Top-up Plan?
The best option is to purchase a super top-up from the same company that provides your base health plan. This reduces paperwork and facilitates easier claim settlement. However, if another company offers super top-up with better terms and a lower premium, you can also choose that company.
There's not much difference between the premiums for a top-up and a super top-up. In many cases, the premium for a super top-up is slightly higher, but the coverage and convenience are much greater. For a family of four, a super top-up cover of up to $50 lakh can be obtained for just $4,000 to $6,000 annually, making it extremely affordable.
If it's just a single major medical expense, a top-up policy may be useful. However, in today's times, when treatments can be frequent and long-term, super top-up health insurance proves to be a safer and more prudent option. The real strength of super top-up is its large coverage at a low premium and the convenience of frequent claims.
What things should be kept in mind while choosing a plan?
-The room rent limit should match the base policy.
-Be sure to check the waiting period for diseases.
-Do not choose a plan just by looking at the low premium.
-Check if there is a sub-limit on any disease.
-Tell your family medical history honestly.
-Network hospitals should be like base plans.
-If different companies have policies, then provide information about both at the time of admission.
