Having an adequate cover is significant while purchasing a health cover, owing to the increasing medical costs. High coverage usually calls for a higher premium as well. In this scenario, it is wise, as experts say, to divide the necessary cover and purchase top-up, super top-up plans or health riders.
Top-up or super top-up plans are designed to offer additional health insurance coverage to the existing health plan. They can be used to upgrade the sum assured of the base plan.
On the other hand, riders are add-on covers for insurers to render and enhance the scope of a health policy resulting in most inclusive protection.
Before choosing these, it's vital to understand their benefits and usage.
Top-up health insurance plans offer additional coverage which is beyond the threshold limit (deductibles) of the insured's existing health plan. It reimburses expenses surpassing base cover only for one hospitalization.
“One can get covered for a considerable sum at a much lower cost with top-up plans. Also, it provides with extra cover that a policyholder would require with considerable savings on the premium,” says Mayank Bathwal, CEO, Aditya Birla Health Insurance.
According to Naval Goel, CEO and founder of PolicyX, a person should invest in a top-up plan when he/she thinks that the existing health insurance plan is not sufficient to offer the required coverage in case of a huge medical crisis.
Super top-up plans
Super top-up plans are similar to top-up plans, except that top-up plan covers a single claim above the threshold limit, while the super top-up plan covers the total of all hospitalization bills above the threshold limit.
"A super top plan would consider the total of all bills that are submitted, regardless whether they are for a single illness or multiple ones. These plans can be renewed annually. However, one must know that the super top-up plan only comes into play once the deductible limit is crossed," explains Amit Chhabra, Head-Health Insurance, Policybazaar.
According to Rakesh Goyal, Director, Probus Insurance, Insurtech Broking Company, a super top-up plan is an ideal option for customers who are already at the risk of getting hospitalized for more than once in a year.
Riders provides benefits to the owner or the beneficiaries of the health insurance contract so that the family members don’t have to face a financial burden.
"When the policy owner purchases extra benefits of rider it becomes a part of the main plan," illustrates Bathwal.
With riders, the existing policy can be customized as per the needs.
"Each policy has a set of guidelines and exceptions specific to the rider as they are meant to enhance the coverage an individual policy will already provide. The IRDAI, insurance regulatory body, has also set a 30 percent of the basic insurance policy limit on the premium for riders. The health insurance riders can be used as a way to pay off debts or fees for children's education, etc," adds Bathwal.
While choosing between top-up plans and riders, Goyal of Probus Insurance says that one should go with the top-up plan for some serious health issues which might need considerable amount for the treatment. On the other hand, riders can be opted when the estimated cost of treatment is known.
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