Now people are well aware of the need of health insurance in our country. But even if you are among the one who are insured, will it be sufficient enough when you actually need it? Suppose you have a 5 lakh insurance cover taken few years back. But looking at how the health insurance cost is rising, it might not be enough in next few years. So suppose if one wants to increase the coverage to Rs20 lakhs from the existing cover of Rs5 lakhs, there are a few options through which one can either upgrade their existing policy or can go for a top-up plan. What should you go for?
Enhance sum insured or a top-up policy
Increasing an existing cover means, you increase the sum insured of your health insurance policy. Increasing a regular cover gives protection for the entire sum insured. Top-up plans, on the other hand, covers you only after a certain amount, called deductible, has been crossed. And this is the reason they are much cheaper when buying a regular health insurance plan for the same sum insured. It is important to note that top up plans work on per single hospitalization basis it helps when a single claim amount is above threshold limit. Super top up plans are also available in the market which considers aggregate of the claims per policy year and not a single hospitalization. These policies are available in individual and floater sum insured options. Nikhil Apte CPO, Royal Sundaram General Insurance - "It would be advisable for the customer to not opt for the top-up plan which has deductible on per claim basis as the probability of claim cost exceeding deductible is low. However, this option will work or gets triggered in case of chronic illnesses"
Difference of Premiums
Top up plans have comparatively lower premiums due to the deductible threshold which needs to be paid either by a regular health insurance policy or burned out of your pocket. For eg, if one has a base plan of Rs.3 lacs and he opts for a top-up plan with Rs.3lacs as deductible and sum-insured of Rs.10lacs, then this plan will be activated only when the single claim is more than Rs.3lacs.
Best Option to go for
If one is just looking for an additional sum insured, then a top-up plan is one of the cost-effective options. If you are looking for additional benefits such as overseas treatment and maternity benefit along with enhanced sum insured, then increase the cover of an existing policy will be a better option. Rajiv Kumar, MD & CEO, Universal Sompo General Insurance- "Annual medical inflation of 6 - 7% is a serious concern and it should be kept in mind while fixing the sum insured. Accordingly top up plans could be chosen and purchased to be adequately covered in case of adverse medical conditions in future." By increasing the sum insured of existing policy you can also increase the sub-limits. For example some policies offer sub-limits on room rents and bed charges at 1% on the sum insured.