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What is Top-Up in Health Insurance?

Top-up health insurance is an additional health coverage option you can add to an existing health insurance policy.

  • 24 May 2023
  • min read

Given the increase in lifestyle ailments and medical inflation, sometimes your basic health plan may not be adequate. This is where top-up health insurance can help you. So, what is top-up in health insurance? Top-up health insurance is an additional health coverage option you can add to an existing health insurance policy. It offers an extra layer of protection against rising healthcare costs and additional coverage beyond the basic health insurance plan. In case the coverage limit of the primary health insurance policy gets exhausted, the top-up plan comes into play. It provides additional coverage, thus acting as a financial safety net. Let’s understand what is a top up plan in health insurance, its types, and more.

What are Top-Up Health Insurance Plans?

Now that you know what is top-up health insurance, the succeeding step is to know the various types of top-up healthcare plans available in the market. Top-up health insurance plans in India come in various types, each catering to the different needs of policyholders. Here are some common types of top-up health plans available in India –

Deductible-based Top-Up Plans:

In this type of plan, the policyholder chooses a deductible amount, which is the threshold limit up to which the primary health insurance policy covers the expenses. If the medical expenses exceed this deductible amount, the top-up plan kicks in and provides additional coverage.

Aggregate-based Top-Up Plans:

The total medical expenses you incur during the policy year get considered in such plans. The top-up coverage gets triggered if the total expenses exceed the chosen aggregate limit.

Super Top-Up Plans:

These plans are similar to aggregate-based top-up plans but provide coverage for multiple claims in a policy year. For example, if the policyholder incurs medical expenses of Rs 3 lakh in one claim and Rs 2 lakh in another claim during the policy year, a super top-up plan with an aggregate limit of Rs 5 lakh will provide coverage for the entire amount.

Disease-specific Top-Up Plans:

Some top-up plans cover specific diseases or medical conditions. For example, there are top-up plans that provide coverage for specific critical illnesses like cancer, heart disease, or organ transplant. These plans can provide additional coverage for specific medical needs and are beneficial for individuals at a higher risk of developing such conditions.

Advantages of Top-Up Health Insurance

To clearly understand what is top-up medical insurance, it is important to understand what it offers. Listed below are some significant advantages of buying top-up health insurance.

• Cost-effective:

Top-up plans are generally more affordable compared to buying a plan with a higher sum insured in the primary health insurance policy. They provide additional coverage at a lower premium, making them a cost-effective choice for enhancing medical insurance coverage.

• Extended Coverage:

Top-up plans act as a financial safety net by providing additional coverage beyond the basic health insurance policy. They cover expenses exceeding the primary policy’s coverage limit, ensuring the policyholder does not face financial strain during a medical emergency.

• Customisable:

Top-up plans can be tailored to suit an individual’s specific needs. Policyholders can choose the deductible or aggregate limit as per their preference and budget, making it a flexible option for enhancing health insurance coverage.

• Tax Benefits:

Just like regular health insurance policies, premiums paid for top-up medical insurance plans are eligible for tax rebates under the Income Tax Act’s Section 80D, making it a tax-efficient investment.

Understanding the ins and outs of what is a top-up policy in health insurance will help you make a knowledgeable decision to buy a top-up plan that fits your needs and budget. Top-up health insurance is a valuable addition to a standard health insurance policy that provides extended coverage at an affordable cost.

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