Living With Healthy Hunger Health Blog
You might have observed a wide variety of policies in the insurance market. Be it senior citizen health insurance, critical illnesses policy, group health insurance or more; every policy caters to a type of policyholder.
Apart from different types of health insurance policies, we also have different classifications of policies. You will have to choose between a regular, a top-up and a super top-up health insurance policy. You need to fathom the difference between these classifications for better decision-making.
In this blog, we discuss the dynamic of top-up vs. regular health insurance.
Top-up vs Regular Health Insurance: Definition
Regular Health Insurance
A medical insurance policy is a financial instrument that provides a protective cushioning for your financial stability in case of unforeseen medical emergencies. The policy offers coverage for medical expenses such as hospitalisation, medical procedures, surgeries, pharmaceuticals and more.
This policy has a threshold amount specified by the insurer at the time of purchase, called the sum insured. The sum insured is the maximum limit a policyholder receives.
Top-up Health Insurance
A top-up health insurance policy is a plan that offers you financial coverage over and above the base policy’s sum insured. It is an additional support in case of high expenses and severe medical emergencies. The top-up health insurance essentially acts as a secondary policy.
Since the nature of the plan is different from that of a regular health insurance policy, most features of this policy are different, primarily the premiums, deductibles and limitations.
Difference Between Top-up Vs. Regular Health Insurance Policy
| Feature | Regular Medical Policy | Top-up Health Insurance |
Coverage |
A regular health insurance policy will offer general coverage. Your sum insured amount and add-ons will decide how much of the medical expenses your policy covers. | Top-up health insurance, on the other hand, offers a fresh amount for financial coverage of medical expenses. These plans are indemnity plans that supplement the existing medical policy. |
Deductibles |
Your regular medical policy contains general voluntary and involuntary deductibles. | Deductibles in a top-up plan are usually high. Only when the policyholder pays the deductible amount will the insurer activate their top-up plan. |
Premiums |
Premium amounts are usually high due to comprehensive coverage, sum insured, and other factors. | The premium amount for a top-up plan activation is low since the risk is mitigated throughout the base and top-up plan. |
Claim Settlement |
The claim settlement procedure is straightforward and often cashless. | The claim settlement procedure is complex, may not be cashless, and depends on the amount claimed by the policyholder. |
Waiting Period |
Regular health plans have a standard waiting period, depending on the type of coverage and condition. | Top-up plans also have a set of limitations when it comes to claim settlement after the waiting period. Reading the policy papers thoroughly is paramount. |
Purchase |
Regular policy purchases can be standalone. | You need to have a base health insurance policy in order to purchase a top-up plan. You can only activate the top-up policy when you have completely exhausted the base policy. |
Things To Know About Top-Up Health Insurance
- Your top-up health insurance can easily be converted into your primary health insurance coverage.
- You receive the top-up coverage only after paying the predetermined deductibles.
- Top-up health insurance offers coverage for pre and post-hospitalisation, in-patient hospitalisation, daycare procedures, organ donation costs, ambulance costs and domiciliary treatments.
- There are no coverage caps for expenses such as doctor fees and room rent.
- If you are young, i.e., below 55 years of age, most companies will not ask for any medical scrutiny.
- Under section 80D of the Income Tax Act of India, you can claim tax benefits on the premiums paid for top-up health insurance.
- If you go claim-free under your top-up health insurance, you earn a predetermined percentage of no-claim bonus for every claim-free year you earn.
- The top-up health insurance coverage is decided by the policyholders.
- It is advised to read your top-up medical policy documents thoroughly to understand the terms, conditions and limitations of your policy regarding no-claim bonuses, filing coverage, claims, waiting periods, deductibles, policy porting and claim settlement.
Ending Note
A top-up health insurance policy is a cost-effective, all-inclusive and profitable plan offering additional coverage and benefits. If you have a regular medical policy, you must buy extra protection.
If you want to opt for a regular medical policy, do prefer the comprehensive health insurance policy. Your choice of policy completely depends on your coverage and medical needs. Make good judgement and choose wisely!
