When you buy health insurance, the plan you choose comes in the form of a ‘base’ or basic health insurance plan.
A top-up is not just limited to health insurance, a policyholder can also use top-up while investing in unit-linked insurance plans
Choosing an insurance plan for you or your family has become a central part of financial planning. With rising healthcare costs and a sense of a proper backup post the pandemic, people are compelled to revisit their healthcare policy and modify it as per the need.
While there are many products available in the insurance market to meet your healthcare needs, there are a few things the consumer needs to know in order to take full advantage of the policy.
health insurance
Usually, when you buy health insurance, the plan you choose comes in the form of a ‘base’ or basic health insurance plan. It covers you against any medical contingencies. In this case, you choose the sum assured while buying the policy.
What is top-up in health insurance?
After purchasing a base plan, for example a cover of Rs 5 lakh, however, due to unforeseen circumstances, the limit for this amount is exhausted, the customer can opt for a top up for the base insurance plan. This acts as a safeguard against the base plan limit.
A top up health insurance plan provides additional medical coverage to the existing health insurance policy.
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A top up health insurance plan allows people to cover their medical expenses even after they have exhausted the sum insured of their regular base health insurance policy.
It is to be noted that the top-up works only after the insured has paid the deductible, which is mandatory.
In other words, a top-up health insurance plan enhances the degree of your financial security against various health-related concerns.
How does top-up work in health insurance?
It works just like your basic health insurance plan, however, with a lower premium burden, which makes it affordable.
However, there is a difference between a top-up health insurance plan with a health insurance rider.
A health insurance rider can only be bought as an additional cover along with your basic health insurance plan. It is usually taken for a specific purpose such as critical illness or personal accident rider. On the other hand, Top-up can be purchased as a standalone plan.
This works when the claim amount is more than the coverage amount of the existing health insurance base policy.
There is another option called super top-up plan. This works when there are repeated claims in a year and the policyholder has exhausted the cover of the plans.
A top-up is not just limited to health insurance, a policyholder can also use top-up while investing in unit-linked insurance plans, adding to the existing premium payment. By doing so, one can increase the investment component by paying additional premium.
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