When should I purchase Super Top up Health Insurance Policy?

This article is not about whether you should purchase a super top up health insurance policy or not. It is absolutely necessary to purchase a super top up plan. The reason being the high inflation in health care sector. The treatment which costs you 5 Lakhs today may cost you more than 30 Lakhs 25 years down the line. Since it is difficult to purchase a policy of 30 Lakhs as the premium increase with the age, it is better to buy a super top up plan which help you reducing the premium outgo.

Now coming back to the main topic, when should you purchase super top up policy? Let me take an example for illustration purpose

Suresh is 35 years old and is covered by corporate health insurance cover of 5 Lakhs. In addition to the corporate cover, Suresh has also purchased a family floater health insurance policy of 5 Lakhs as he knows that his corporate policy will not cover his family after retirement. Or if he changes jobs, there are chances that the next employer may not provide the same amount of health insurance cover.

As Suresh always tries to gain financial knowledge through different financial portals, he heard about super top up policy and decided to do a little research about the same. The premium for a 25 Lakhs super Top up policy with 5 Lakhs deductible was in the range of 3000-5000 for different policies. He immediately decided to purchase the policy.

Was Suresh right in purchasing the super top up policy of 25 Lakhs with 5 Lakhs deductible?

Yes, Suresh was absolutely right in purchasing a super top up policy.  The coverage now is increased 30 Lakhs for the family.

You can read the article on how Super Top up can reduce your premium outgo.  https://www.finvin.in/reduce-premium-super-top-policy/

Was Suresh right in deciding the timing of purchasing a super top up policy? Let us see

5 Years back, Suresh had purchased the health insurance cover of 5 Lakhs on 1st January. He is renewing this policy in January every year. Let us call this policy as Base Policy. He renewed it last on 1st January 2020.

Suresh purchased the Super top up policy on 1st June 2020.  There is a gap of 5 months here.

Does this gap make a difference while filing a claim?

Yes, it does. There are chances that you would not get the claim from your super top up policy!

Let us see now, in which case, Suresh`s family will not get a claim. (I am not considering the corporate health insurance claim here, the example is just for illustration purpose)

Suresh was not well and was admitted in the hospital in the month of March 2020. The hospital bill was 5 Lakhs. He got the claim of 5 lakhs from his base policy, which was renewed in January 2020.

In the month of September 2020, Suresh`s wife got admitted in the hospital and the hospital bill was 4 Lakhs. Will he get this claim from the base policy or Super Top up policy? After all his family is covered for 30 Lakhs through the 2 policies?

This claim will not be payable either from the base policy or from the Super Top up policy!

It will not be payable from the base policy because he has already exhausted the 5 Lakhs coverage in the first claim in March 2020.  Now he can claim from this policy only after January 2021 renewal.

It will not be payable from the Super top up policy because from 1st June 2020, there is no claim upto the deductible limit of 5 Lakhs. Since the Super Top up policy was purchased on 1st June 2020, the financial year counted for the super top up policy would be from 1st June 2020 to 31st May 2021. The claim of 5 Lakhs paid in March 2020 will not be counted here.

The additional expenses of 4 Lakhs has to be paid from Suresh`s own pocket. If the claim goes above 5 Lakhs in September, the additional amount (in excess of 5 Lakhs) would have been paid from the Super Top up policy.

In simple terms, the claim from this Super top up policy will be payable only if there is claim in excess of 5 Lakhs( deductable amount ) from 1st June 2020 to 31st May 2021.

Had he purchased the Super top up policy also on 1st January 2020, this issue would have been avoided.  In such case, the coverage of 30 Lakhs is available for the period 1st January 2020 to 31st December 2020.

And that is precisely the reason why base policy and super top up policy should be purchased at the same time.

If you already have a base policy and if you are planning to purchase a super top policy, purchase it only along with renewal of your base policy.

11 thoughts on “When should I purchase Super Top up Health Insurance Policy?”

  1. I have a family floater policy of Rs. 15.00 lakhs of HDFC Ergo-Bhandhan Bank for self and wife; 10% no claim bonus max upto Rs. 15.00 lakhs ( 10 years; 15.00+15.00=30.00). Can I take a Super Top Up Policy on this family floater health policy? I am 59 yrs, my wife is 56 yrs; I had taken the policy on 01.07.2018.

    1. shankha bhattacharya

      I seems that – this policy is from Bandhan Bank , If I am not wrong. are you an employee of the bank ? or you are a customer of the bank ? while you take the policy did yo and your family goes under medical examination as mentioned in the HDFC ergo policy doc because age is >50. If you and your wife are in any medicine under doctor , have you clearly mentioned or submitted while taking the policy ? have you read the 20-30 pages of HDFC ergo policy terms and condition document clearly ? there is a clause in the bonus also – which reduce the bonus if there is any claim (as per i remember from policy T&C documents – read 1 years ) , if your medical record is not approved by ERGO or you have not submitted any medical examination report then you will face big trouble while doing any claim ( i hope you should not get hospitalized) .

    2. You can restructure your policy and have 10 lakhs base plan and 1cr super topup with 10 lakhs deductibles. Premium for total 1.1 cr cover will be cheaper than 15 lakhs base plan.

  2. I have made this mistake 2 yrs back. my super top policy renewal is 2 months before my base policy. I want to make it same date but company does not change the renewal dates. What should i do ?

    1. Hi

      What is the super top cover amount and what is the amount of deductible? Also, is there any change in health conditions of any of family members who are covered in super top up policy?

  3. Extremely important nuances beautifully explained. I didnt know of the importance of purchasing super top around the same time as the base policy renewal date until Melvin explained it.

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