Will you buy health insurance policy?
Ask this question to someone who has a history of hospitalization in the recent past. He will definitely tell you the need for going for a health insurance.
In India, the health care costs are increasing every day. New and new medical procedures are introduced every year. All these are creating trouble for everyone who are living with limited income. In the absence of health insurance, many are living a difficult life. They are either avoiding treatments or are forced to depend on government hospitals.
If you are having a decent health cover from your employer, you will not face this issue now? But after retirement, you will be facing this because purchasing a policy can be almost impossible at higher ages. Health insurance is something which you cannot purchase when you really need it. Purchase it early when you are healthy.
How a super top up health insurance policy can help you? Â
But with increasing premium rates, is there any cost effective option in health insurance. Super Top up Health Insurance will be a better option in many cases.
The inflation rate in healthcare sector is much higher than the general inflation and with improved medical technology, the healthcare costs are increasing day-by-day. Even a 5 Lakhs health insurance policy may not be sufficient for you. Super Top up Insurance will help you in this regard.
Before going forward on how super top up health insurance policies can help to reduce your health insurance premium, let us see what a super top up policy is.
Super Top Health Insurance Policy
In super top up health insurance policy, the additional coverage is provided only when the deductibles are over. Now, you will ask me what deductibles are.
Deductibles are the threshold limits provided by the super top plans. These plans start paying the claim over and above the threshold limits or deductibles. Let us see it with an example.
Suppose you have a health insurance policy of 5 Lakhs and you have purchased another super top up policy of 20 Lakhs with 5 Lakhs deductibles. Now, if one of your family members is admitted in the hospital and the total bill is 7 Lakhs.
First 5 Lakhs will be paid by the base health insurance policy. Next 2 Lakhs would be paid by the super top up health insurance plan as this plan will only pay above the deductible limits of 5 Lakhs.
Confused! Let us understand it with a table. Here there are 6 claims in a year.
This is how super top up policy work. You can have different sum assured and various deductibles options in super top up policy. So, if you have a base policy of 5 Lakhs and a Super top up of 20 Lakhs with 5 Lakhs deductable, the total cover will be 25 Lakhs. In the above example the first 2 claims will be paid by the base health insurance policy of 5 Lakhs, next 3 claims will be paid by the super top up policy and the 6th claim will not be paid by any policy.
The deductibles start from 1 Lakh and can be 2 Lakhs, 3 Lakhs, 5 Lakhs and even 10 Lakhs.
The same is with sum assured. Most of the companies offer sum assured up to 25 Lakhs. In few case like ICICI Lombard offers upto 50 Lakhs and Liberty offers upto 1 Crore.
Now why super top up policy and not a regular health insurance policy?
The reason is, the premium in super top up policies is way cheaper than the normal health insurance policies.
Suppose I have a family of 3 (2 Adults and 1 Child) and I want to take a health insurance of 25 Lakhs. There are 2 options
- Normal Health Insurance Policy of 25 Lakhs
- Normal Health Insurance Policy of 5 Lakhs and a super top up health insurance of 20 Lakhs with 5 Lakhs deductibles
What do you think, which one is better? Most of the features are same in base health insurance policy, the only difference comes in the premium of both the options.
Option 1 – Normal Health Insurance Policy of 25 Lakhs
Adult 1 – Age – 40 Years
Adult 2 – Age -37 Years
Child 1 – Age – 8 Years
Sum Assured – 25 Lakhs
Annual Premium for 25 Lakhs Policy – Rs. 30,000
Option 2- Normal Health Insurance Policy of 5 Lakhs and a super top up health insurance of 20 Lakhs with 5 Lakhs deductibles
Adult 1 – Age – 40 Years
Adult 2 – Age -37 Years
Child 1 – Age – 8 Years
Premium for 5 Lakhs Base Policy – Rs. 17,000
Premium for Super Top up Policy of 20 Lakhs with 5 Lakhs deductibles – Rs. 3,000
Total Premium – Rs. 20,000
So, there is a difference of Rs. 10,000 in premium for the same cover o 25 Lakhs.
There is a point of caution for super top up policies
You should buy it from the same insurer as it is easy for cashless claims. Otherwise you first have to pay the money from your own pocket and then reimburse it.
Do not confuse it with Top Up policies with super top up policies. Top up policies are trap.
What do you think, which option is better- Health Insurance policy of 25 Lakhs or a combination of health insurance policy of 5 Lakhs and super top up policy of 20 Lakhs with 5 Lakhs deductibles?
Very nice information and clear writing. Congratulations.
Thanks Satheesh.
Thanks Melvin for the ver informative article.
Super top up is also yearly based renewal similar to base policy?
Hi Johnson
Yes, super top is also early based renewal like the base policy.
Hi,
“Do not confuse it with Top Up policies with super top up policies. Top up policies are trap”
Can you please elaborate this .Why it is a trap?
Same question
Sir
Please refer to the section of the article which mentions the below
There is a point of caution for super top up policies
You should buy it from the same insurer as it is easy for cashless claims. Otherwise you first have to pay the money from your own pocket and then reimburse it.
Does it mean, If the base policy is of insurer A and super top up policy is bought from Insurer B, During claim process, the money needs to be paid and then claimed via reimbursement ONLY
Yes Ramya, the money has be be claimed via reimbursement.
Interesting Article. I have a question regarding deductible or say base insurance cover. Let us consider two options:
Option 1: Normal Health Insurance Policy of 1 lakh + 25 lakh Super top up with 1 lakh deductible
Option 2: Normal Health Insurance Policy of 5 lakh + 25 lakh Super top up with 5 lakh deductible
I believe premium in Option 1 would be less. Correct me if I am wrong here. Also, are there any advantages with having high normal health insunce cover 1 lakh vs 5 lakh vs 10 lakh?
Hi Lawish
Option 1st would be more as chances of spending 1 Lakh in a year is more. Yes, normal health cover of higher amount has cashless claim settlement advantage.
Enlightening!
Now a days majority of the Health ins. organization covers super top up like – cigna manipal , hdfc ergo , liberty mutual , max bupa . So if one has base policy form any of them , he definately have the super top up from the same to avail the cash less policy. Then what is the key secret – why super top up will have very less premium ? I read the T&C for both base and super top from the same companies as mentioned above , then still not able to get why super top up very very less costly – ? what is the secret with in it while taking from same company?
Hi
The chances of claiming higher amount from base policy is less at this point of time, in India. The premiums of super top up policies may change in future depending on health care inflation and when people start claiming higher amount from base policies.
If I have a base policy of 5 lakhs and a Super top up of 20 lakhs with 5 lakhs deductible, the total cover will be 20 lakhs and not 25 lakhs as mentioned in the article.
20 lakhs super top up with 5 lakh deductible is actually only 15 lakh cover and to that when you add 5 lakh base policy, you’d have a cover of 20 lakhs.
Dear Shyam,
Super top up policy term comes into picture when you have an existing base policy or you buy a certain super top up policy which in built has a base policy.
Consider it this way,
You already have a base policy of 5 lac, and you are buying a super top up policy of 20 lac with 5 lac deductible, here practically 5 lac deductible is covered under your existing base policy, once 5 lac deductible is consumed super top up plan activates, eventually it becomes an insurance cover of 25lac (5Lac base policy+20 Lac super top up with 5 lac deductible)
Hope I am clear.
Amazingly written. Thanks
Very informative !
Is Reassure policy from Max Bupa is best policy available now in Market? Also would be worth buying these policy online from Max Bupa executive itself or from Policy Bazar agent for the same.
Also Policy Bazar agent specifies he would waive off loading and Max Bupa executive mentions this is not possible and they are actually fooling. Any advise here please?
The article is really very informative. Thank you, Melvin sir.
Thanks a lot sir…i had no idea about all this earlier and was taken for a ride!
The example is very clear and demonstrates the scenario which is really very important.
Very usefull information , explained in simple manner. Thank you sir