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How Does Top-up Health Insurance Work?

Top-up health insurance is a cost-effective way to enhance your healthcare coverage, but how does it actually work? In this article, we demystify top-up health insurance, explaining its mechanics, advantages, and how it complements your existing coverage.

  • 03 Nov 2023
  • 3 min read

Emergencies don't wait for anyone, and neither do medical expenses. While basic health insurance covers a significant portion of healthcare costs, sometimes unforeseen circumstances can lead to expenses beyond its coverage. This is where top-up health insurance acts as a financial safety net. Let's delve into how this insurance option works.


What is top-up health insurance?

Top-up health insurance serves as a crucial extension of your existing individual or employer health insurance coverage. It provides policyholders with additional financial protection to address situations where their primary health insurance coverage proves insufficient to cover hefty medical expenses. This insurance option acts as a safety net, ensuring you are not left financially vulnerable during unexpected medical emergencies.


In simpler terms, imagine your primary health insurance covers up to 6 lakh sum insured. However, in case of a serious illness or accident, your hospital bill came to 10 lakh. In this case, the bill leaves you with 4 lakh out-of-pocket expenses. This is where a top-up health insurance plan comes into play, covering the remaining 4 lakh. In other words, it steps in to cover the expenses surpassing your primary coverage, offering comprehensive protection and reducing your financial burden.


A top-up plan provides peace of mind by bridging the gap between your existing health insurance coverage and potentially high medical costs. It ensures you can access quality healthcare without worrying about the financial implications of extensive treatments or procedures. This added layer of security makes top-up health insurance an essential consideration for anyone seeking higher coverage against unforeseen medical expenses.

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How does top-up in health insurance work?

If you are wondering: “how does top up health insurance work?”, let's take a look at a few scenarios. These will help you learn about the workings of this form of health insurance.


  • Coverage expansion

A basic health insurance policy purchased by you or provided by your employer may provide a lower coverage. A top-up policy can cover even up to 1 crore.


  • Lower premium

Suppose you have an existing 5 lakh policy with INR 5000 premium. To upgrade sum insured, option 1 is to purchase a new INR 5 lakh policy with a premium of INR 5,000. Option 2 is to get a top-up policy of INR 10 lakh with a much lower premium of INR 1000.


  • Top-up plan mechanics

In case of a claim of say 8 lakhs, the first 5 lakhs will be covered under your base policy and the remaining 3 lakh under your top-up policy. Every top-up policy will have a pre-decided, fixed amount that you must pay under your base policy, called the “deductible”. You can fix the deductible as per your existing coverage so that you don’t have to pay out of pocket at the time of a claim.


  • Financial prudence

The top-up plan offers comprehensive coverage without the need to buy another base policy or upgrade premiums. It ensures a financial safety net for significant medical emergencies.


By strategically combining your base health policy with a top-up plan, you aim to ensure comprehensive coverage while optimising costs and safeguarding your family's health and finances.

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