Top-Up vs. Super Top-Up Health Insurance What’s the Difference

What is Top Up Health Insurance?

A top-up health insurance plan gives you extra coverage, but it only kicks in when the money from your regular health insurance runs out. The cost of a top-up plan is typically lower than that of a regular health insurance plan since it only starts after you've used up a certain amount (called the deductible). The deductible amount varies depending on the insurance company and the plan you choose.

1. Example of How a Top-Up Plan Works

Let’s say you have a top-up health insurance plan with:

• Coverage: ?10 lakhs
• Threshold limit: ?5 lakhs (This is the amount your base insurance covers before the top-up plan kicks in.)

How it works:

• If your claim is ?7 lakhs, the top-up plan will only cover the amount above ?5 lakhs.
• So, the top-up will cover ?2 lakhs (?7 lakhs claim - ?5 lakhs base coverage).

Key difference:

The main difference between regular health insurance and a top-up plan is that the top-up only provides extra coverage after the base plan is exhausted.

2. Benefits of Top-Up Health Insurance

• Top-up plans are a cost-effective option, as they provide a high level of coverage at a lower purchase price than increasing your base health insurance.
• Top-up plans also offer advantages to older persons, as they offer additional coverage at a low cost compared with standalone policies.
• You may opt for a deductible limit on what you are going to pay out of pocket, depending on your current coverage and cost.
• Premiums paid for top-up health insurance plans are eligible for deduction under Section 80D of the Income Tax Act, 1961.
• These plans enable you to maintain health coverage without a change to your current policy, so you are protected from the costs of major medical expenses.

What is Super Top-Up Health Insurance?

Super top-up health insurance is like a top-up plan, but it works differently. Instead of looking at one claim, it adds up all your medical expenses for the year. Once the total amount of your medical bills goes beyond the deductible limit, the super top-up plan starts covering the costs. This is helpful if you have several small claims during the year and their total exceeds the deductible limit.

1. Example of How Super Top-Up Health Insurance Works

Let’s say you have a deductible of ?3 lakh.

During the year, you have:

• ?2 lakh in medical expenses for one hospital stay
• ?3 lakh for another hospital visit

With a top-up plan, it won’t help because neither of the individual claims exceeds ?3 lakh.

However, a super top-up plan will cover the remaining expenses because your total medical bills add up to ?5 lakh, which is above the ?3 lakh deductible.

2. Benefits of Buying Super Top-up Health Insurance

• Super top-up plans add up all your medical expenses in a year, so they are helpful if you have multiple hospital visits.
• These plans offer high coverage at a lower cost compared to regular health insurance policies.
• Super top-up plans cover all hospitalisation bills in a year once the total expenses exceed the deductible.
• You can increase your coverage without changing your current health insurance policy.
• Premiums paid for super top-up plans can help you save tax under Section 80D of the Income Tax Act.

Difference Between Super Top-up Health Insurance and Top-up Health Insurance

Now, look at this table to know the difference between top-up and super top-up health insurance.

What is a Deductible in Top-up/Super Top-up health insurance?

A deductible is the amount you have to pay before the insurance company starts paying for your medical expenses.

For instance, if you have a base cover of ?10 lakhs and a top-up plan of ?5 lakhs, say with a deductible of ?2 lakhs, so the first ?2 lakh will be paid by yourself. After that, the company will pay for the rest up to the total limit of ?10 lakh.

Insurance companies use this feature of deductibles, to prevent people from making claims for too small amounts.

Conclusion

Now that you know the difference between top-up health insurance plans, you can choose the one that best suits your needs. Both plans give you extra financial protection during medical emergencies. Before buying, compare the plans online with Square Insurance to get the best coverage.