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Top up Insurance Plan and its Benefits

There is a famous saying "Health is like money, we never have a true idea of its value until we lose it." If you do not take proper care of your health it is going to cost you a lot of money. In spite of your best efforts, if disease strikes, be prepared with a top up health plan. Learn the benefits of a Top-up insurance plan before availing it.

What is a top up health plan?

So what is a deductible?

A deductible is basically a medical expense you have to pay from your own pocket called an out of pocket expense. If you incur medical bills up to a particular set limit in your top up plan called deductible you have to pay it yourself. Your health insurer will not bear this medical expense. Let us understand this with a simple example : You have availed a top up health plan with a sum assured of INR 5 Lakhs and a deductible of INR 2 Lakhs . The deductible is that portion of the medical expenses which you have to bear yourself. If you suffer from a disease and incur a medical expense less than INR 2 Lakhs you will have to pay it from your own pocket called an out of pocket expense. The top up health plan is of use only if your medical bills breach (go above) the threshold limit of INR 2 Lakhs called a deductible. If your medical bills cross the deductible (go above the set threshold) which is INR 2 Lakhs in this case, then your health insurer will pay your medical bills above INR 2 Lakhs up to INR 5 Lakhs which is the sum assured.

Sum assured - Deductible is paid by the top up health plan

If you avail a top up health plan with a deductible of INR 3 Lakhs your premium will be lesser than a top up health plan with a deductible of INR 2 Lakhs. This is because you have to bear a higher amount of medical expenses INR 3 Lakhs instead of INR 2 Lakhs from your own pocket and this means a lesser premium offered by the top up health plan.

What about medical costs below the deductible limits?

You can take a health insurance plan with a sum assured up to the deductible limit in addition to the top up health plan. If you have a top up health plan with a sum assured of INR 5 Lakhs and a deductible of INR 2 Lakhs, then you must avail another health plan with a sum assured of INR 2 Lakhs. If you suffer from any disease in which you incur medical bills less than INR 2 Lakhs, then you can claim this amount from the health insurance plan provided by your employer or your own health insurance plan.

Why a top up health plan?

The top up health plan is very useful if you suffer from a sudden one off disease which might blow your savings away, say a heart attack. You have bought a top up health plan with a sum assured of INR 6 Lakhs which has a deductible of INR 2 Lakhs. You suffer from a heart attack and the medical bill is INR 5 Lakhs . This is where your top up health plan is very useful. You will have to bear the medical expenses of INR 2 Lakhs (up to the deductible limit) from your own pocket or from your Company health insurance plan. The remaining amount of INR 3 Lakhs (Your medical bill for the heart attack – Deductible) which is (INR 5 Lakhs – INR 2 Lakhs) is paid by the top up health plan. If you had bought a normal health insurance plan with a sum assured of INR 6 Lakhs then the premium you would have to pay would be much higher than a top up health plan with a sum assured of INR 6 Lakhs.

Why you need to be careful in a top up health plan?

A basic top up health plan pays your medical bills only for a single hospitalization in a year (you pay the premium to cover you for a year) and only if your medical bills breach the deductible. Let us say you have a basic top up health plan with a sum assured of INR 5 Lakhs and a deductible of INR 3 Lakhs. If you are hospitalized with a disease which means a medical bill of INR 2 Lakh and another hospitalization say a month later which means a medical bill of another INR 2 Lakhs then your basic top up health plan will not pay you any money as your deductible is INR 3 Lakhs which has not been crossed. Your total medical bill after hospitalization may be INR 4 Lakhs but the basic top up health plan states that your medical bills need to cross INR 3 Lakhs (deductible) only in a single instance of hospitalization. This means the premium you pay on the basic top up health plan is wasted if your hospitalization bills do not cross the deductible and your top up health plan is not triggered at all.

What is a super top up health plan?

The super top up health plan looks at the total medical costs you have incurred on all your hospitalizations in the year which you pay the premium. You have a super top up health plan with a deductible of INR 3 Lakhs and a sum assured of INR 5 Lakhs. You are hospitalized thrice in the year and each time you have a medical bill of INR 1.5 Lakhs. Your total medical bills are INR 4.5 Lakhs for the year. Your deductible is INR 3 Lakhs for the year which has been crossed. The super top up pays your medical bill of INR 4.5 Lakhs. Your basic top up health plan with a deductible of INR 3 Lakhs would not have paid you any money as your medical bills have to cross INR 3 Lakhs (deductible) only in a single instance of hospitalization. Remember "Sickness comes on horseback and departs on foot". In this time of need your top up health plan saves the day. So avail a top up insurance plan and enjoy its benefits.

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