A medical emergency can result in unforeseen financial strain, even if you have a health insurance plan. Frequently, the hospitalization expenses surpass the coverage limit of a typical health insurance policy, causing the policyholder to incur the extra costs out-of-pocket. This is where a top-up health insurance plan becomes useful. It functions as a safety net by providing extra coverage beyond the sum insured of your existing health insurance policy, ensuring you are adequately prepared for any medical emergencies.

What are Top-up Health Insurance Plans?
A top-up health insurance policy is an additional coverage that becomes active once the threshold limit, referred to as the deductible, is surpassed. This plan is intended to enhance your current health insurance policy by offering another layer of financial security. For example, if you possess a health insurance policy with a sum insured of ₹3 lakh and a medical bill of ₹5 lakh, your top-up plan will address the extra ₹2 lakh, after you pay the deductible amount from your base policy. It’s a budget-friendly method to improve your health insurance coverage without significantly raising your premium.

What are the Types of Top-Up Health Insurance Plans?
If the policyholder’s medical emergency claims exceed the health insurance policy plan coverage, then the policyholder can claim the additional amount from the top-up plan. There are two types of plans — top-up and super top-up.

1. Top-up plan
   This is applicable on a per year per claim basis and is effective when the claim amount surpasses the current health insurance policy’s coverage limit.
2. Super top-up plan
   This is applicable when, due to recurring claims within a year, the policyholder depletes the coverage of the health insurance plans.

Claim Examples

• Mr. A — Health Insurance of INR 3 Lakhs + Top-up Plan of INR 5 Lakhs
  • Claim 1: INR 3 Lakhs — Covered by the health insurance.
  • Claim 2: INR 1 Lakh — Policyholders are required to pay the entire amount since the top-up plan will only cover the claim if it exceeds the health insurance coverage plan.
  • Claim 3: INR 4 Lakhs — Only INR 1 Lakh will be covered by the top-up plan, which is the amount exceeding the policyholder’s health insurance coverage plan. The policyholder will incur INR 3 Lakh, as they have already exhausted their health insurance coverage amount with their first claim.
• Mr. B — Health Insurance of INR 3 Lakhs + Super Top-up Plan of INR 5 Lakhs
  • Claim 1: INR 3 Lakhs — Covered by the health insurance.
  • Claim 2: INR 1 Lakh — The super top-up plan will cover this claim even though it doesn’t exceed the deductible.
  • Claim 3: INR 4 Lakhs — The super top-up plan will cover the full amount even if the health insurance has already been exhausted with previous claims.

How Does Top-Up Health Insurance Work?
A top-up health insurance plan is activated only after the existing health insurance policy amount has been exhausted. The distinction between top-up and super top-up plans is that the top-up plan only covers a single claim exceeding the current health insurance policy, while the super top-up plan addresses collective medical expenses within a year.

Benefits of Top-Up Health Insurance Plans
Choosing a top-up health insurance policy comes with various benefits:

1. Expanded Coverage at Reduced Premiums
   A top-up health insurance plan permits you to boost your coverage amount without having to elevate your current health plan, leading to reduced premiums compared to a higher sum insured in a basic policy.
2. Economical Premiums
   The premiums associated with a top-up plan are generally lower in comparison to the cost of enhancing the base health insurance policy to a higher sum insured.
3. Extensive Protection
   Top-up plans take care of expenses that exceed the deductible limit, ensuring extensive protection against significant medical expenses.
4. Adaptability
   You can select a top-up plan with a deductible amount that fits your financial capability, providing you with the adaptability to manage your health insurance expenses effectively.
5. Tax Advantages
   Premiums paid for a top-up health insurance policy are eligible for tax reductions under Section 80D of the Income Tax Act, contributing to the financial advantages of this policy.

What is Included in a Top-Up Health Insurance Policy?
A top-up health insurance policy encompasses a broad array of medical expenses, similar to a standard health insurance plan. Some major inclusions are:

1. In-patient Hospitalisation
   Covers costs related to hospitalisation, comprising room rent, nursing fees, and doctor’s charges.
2. Pre and Post-Hospitalisation Costs
   Expenses incurred before and after hospitalisation, typically up to a defined number of days, are covered.
3. Daycare Treatments
   Treatments that do not necessitate a 24-hour hospital stay are included under the top-up plan.
4. Ambulance Fees
   Costs for utilizing an ambulance service during a medical emergency are also covered.
5. Home Treatment
   Medical treatments received at home, under certain conditions, are included.

How Does Top-Up Insurance Differ from a Basic Health Insurance Policy?
The main distinction between a basic health insurance policy and a health insurance top-up policy lies in the deductible aspect. A basic plan addresses medical expenses up to the sum insured from the very first claim. Conversely, a top-up plan becomes applicable only once medical bills surpass a specified deductible sum. Here’s a brief comparison:

Conclusion
A top-up health insurance policy serves as a bridge between health coverage and medical emergency costs. It assists in raising the health insurance limit at a lower expense. Top-up health insurance is a suitable choice for policyholders with a family floater plan or those with a history of health issues.