Benefit from top-up health insurance


A top-up health insurance policy is an additional insurance cover for an existing health insurance. This means in addition to a basic mediclaim policy, you can purchase a top-up cover, which will give you coverage over and above what is available in your original policy. This usually works out to be cheaper than if you enhance limit of the same policy or purchase a new health policy.


The main difference between a top-up cover and a regular health insurance policy is that top-up plans can be used only in case expenses incurred are beyond a certain limit. This limit, known as the deductible is decided beforehand and premiums are calculated accordingly. A top-up plan with a higher deductible has a lower premium attached to it.

Another criterion is that a top-up plan normally works only on a single incidence of hospitalisation. This means that you can use the top-up plan only if your medical bills exceed the deducible during a single hospitalisation by a single member.

How it Works

Let us assume you have an existing health insurance policy with your employer which covers you and your family to the extent of Rs 3 lakh. If your wife is hospitalised during the year and expenses amount to Rs 4 lakh, then you must bring in Rs 1 lakh from your savings.

Now, let us assume you have taken a top-up insurance for Rs 5 lakh with a deductible of Rs 3 lakh. In this case, the extra Rs 1 lakh, which is over and above the limit of Rs 3 lakh from your existing policy, will be paid by the top-up policy. If you incur expenses of Rs 8.5 lakh, then the maximum amount that can be claimed is Rs 8 lakh (Rs 3 lakh from the existing policy and Rs 5 lakh from the top-up policy). The extra Rs 50,000 needs to be paid from your savings.

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