A top-up health insurance is an additional policy to the base standard policy. Top up policies can be issued either as individual or as floater policies. The top up policy comes into force only when the hospitalization expenses exceed the threshold limit of the base policy. This limit is called deductible. A deductible is that portion of the claim amount that is not covered by the insurance company and has to be paid by the insured person/insurance company providing the base cover. For example if the top up policy is taken for Rs 9 lakhs with deductible of Rs 4 lakhs, then Insurance Company providing the Top up cover will entertain claims only when the claim amount exceed Rs 4 lakhs and claim of max Rs 5 lakhs will be paid by the Company. The initial amount of Rs 4 lakhs will be paid by the Company providing the base cover or it has be borne by the policy holder himself if there is no base policy. In case of floater top up policy, the deductible is applied to each individual claim and not in aggregate.
There are pricing advantage of a top up cover as can be observed from the following example:
Option 1: If a senior citizen, aged 61 years takes an individual health insurance policy for Rs 5 lakhs from Apollo Munich, the annual premium comes to Rs 28921/- (approx)
Option 2: Alternatively, he can opt for a combination of lower individual cover and balance as top up cover. In this case he can take a base policy of Rs 2 lakhs for the which premium will come around to Rs 13,500/-(Approx)in Apollo Munich and a top up cover of Rs 5 lakhs with deductible amount of Rs 2 lakhs for which premium will be around around to Rs 5,704/-(Approx). So he will have to pay Rs 19,204/- in aggregate for total cover of Rs 5 lakhs.
Hence Option 2 is cheaper than option
These policies are affordable due to lower premium compared to standard hospitalisation policy. Further if the employer provided cover is not adequate, top up policy is suitable. It comes in handy for senior citizens who otherwise have to pay exorbitant premium for additional cover. But it cannot help, if the individual claims are all below the threshold limit. Top up policies can be taken as add-on policies with any other health insurance policy. One can buy top up health insurance policy in any insurance company, even if his/her base policy is from some other company. Income tax benefit is also available on the premium paid as per section 80-D of income tax Act.
Comparison of top up policies
(Service tax taken at 10.30%)
|Name of the Company||United India||Bajaj Alliance||Star health||ICICI Lombard||Bharti Axa||Apollo munich|
|Name of product||Super top up||Extra care||Super surplus||Health care plus||High deductible||Optima Plus|
|Minimum cover||Rs 5 lakhs with Rs 2 L deductible||Rs 10 lakhs with Rs 3 L deductible||Rs 7 lakhs with Rs 3L deductible||Rs 5 lakhs with Rs 2L deductible||Rs 3 lakhs with Rs 1L deductible||Rs 5 lakhs with Rs 5L deductible|
|Maximum cover||Rs 20 lakhs with Rs 5 L
|Rs 15 lakhs with Rs 5 L deductible||Rs10Lakhs with Rs 5L
|Rs 10 lakhs with Rs 4 L deductible||Rs10lakhs with Rs3L deductible||Rs 5 lakhs with Rs 1L deductible|
|Entry age||18-80 years||18-70 years||5-60 years||5-60years||5-65 years||3m-65 years|
|Renewal up to||Life time||80 years||75 years||70 years||70 years||Life time|
|Waiting period for pre-existing illness||4 continuous year||4 continuous year||3 continuous year||4 continuous year||4 continuous year||4 years|
|Premium for Rs 10 lakhs sum insured with Rs 3L deductible at 35 years||Rs 3,199||Rs 2,758||Rs 4,412||Rs 2,206||Rs 1,442||Rs 1,158*|
*Rs 1,158/- premium for sum insured Rs 5 lakhs with Rs 2 lakhs deductible