Health insurance has always been a necessity. However, it wasn’t until the prevalence of the COVID-19 pandemic that people realized the need for it and that a basic Rs 5 lakh cover won’t suffice. At such a time, super top-up health insurance gained prominence. This type of insurance helps you stay on top of medical inflation and have confidence about covering future medical costs.
What is Super Top-Up Health Insurance?
A super top-up plan is an extension of your existing base health cover. The former is similar to a standard health insurance policy in covering hospitalization bills and medical bills. However, its coverage initiation begins after the policyholder exceeds the deductible limit of the policy. Ergo, you have to bear the hospitalization expenses up to the deductible limit for the super top-up plan to get activated and cover the amount exceeding the policy limit.
For instance, you decide to upgrade your Rs 3 lakh health insurance cover. You also purchase a super top-up health insurance policy of Rs 10 lakh with a deductible of Rs 3 lakh. Once your base health cover touches the Rs 3-lakh limit after hospitalization, the super top-up insurance plan covers you for another Rs 10 lakh.
Super top-up health insurance typically has a low premium due to its deductible clause and is available as individual and family floater plans. Given the financial issues caused by COVID-19—pay cuts, job loss, and the like—a super top-up plan seems like a practical solution to have a safety net for the future.
Ways to Maximise the Benefits of Super Top-Up Health Insurance
Here are some ways to help you get the most out of your super top-up plan:
1) Buy it at the Right Time
Yes, there’s such a thing as the right time to purchase this type of insurance. Ideally, you want to get a super top-up plan the same month as your base health insurance policy—the exact date would work the best. Buying both types of health insurance plans in different months complicates claim payments.
For instance, your Rs 2 lakh base plan is valid from January 2021 to December 2021, and your Rs 5 lakh super top-up one from April 2021 to March 2022. This means your hospitalization expenses must exceed Rs 2 lakh between April 2021 and March 2022 for the super top-up policy to cover them. Now imagine that you undergo two hospitalizations during 2021, and the first bill (generated in January 2021) is Rs 2 lakh. It’s a no-brainer that your base health insurance policy will cover this expense. However, if you get hospitalized again in April 2021 and the bill is Rs 1.75 lakh, you will have to pay it. This is because you exhausted your base cover for the year and your super top-up plan only works when you exceed the limit of Rs 2 lakh during the policy period—in this case, April 2021 to March 2022.
2) Stick with the Same Insurer
Your base health insurance plan and super top-up one are separate policies—their application and claims processes also vary. While you can buy your super top-up policy from a different insurance provider, having the same insurer for both types of policies is better as it makes claim processing more seamless.
3) Select the Appropriate Deductible Limit
Since your super top-up insurance coverage depends on your deductible limit, you must choose this value after careful consideration. You don’t want to be in a position where your super top-up coverage goes to waste because of an unusually high deductible limit.
4) Claim Income Tax Deductions
The premiums you pay for super top-up plans are eligible for income tax benefits under Section 80D of the Income Tax Act. The policyholder can avail of tax deductions up to Rs 25,000 for policies covering self, spouse, and children. You can get a deduction of another Rs 25,000 if your plan covers parents too (Rs 30,000 if your parents are over 60 years old).
5) Check the Network of Hospitals
If you purchase your base health insurance cover and super top-up plan from two different insurance providers, the network of hospitals may vary. Check the list of network hospitals before buying the super top-up insurance policy to ensure you can avail of cashless hospitalization. Hospitals outside the network of the insurer typically don’t offer this benefit.
6) Cross-Check the Waiting Period
The waiting period associated with your base health insurance plan and super top-up one could differ. Check this difference before purchasing your super top-up insurance plan to avoid stress in the future.
Overall, super top-up insurance is a great way to ensure you have an added financial shield during medical emergencies.