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.
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.
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.
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.
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.