As the name suggests, a ‘top-up health insurance’ policy comes in handy when you have exhausted your Sum Insured in your basic health insurance policy. Typically, it could be due to single or multiple hospitalisations in a year for which you might have utilised your basic health cover or in most of the cases provided by your employer’s Group Health Insurance Scheme.
Top-up health insurance policies will have a ‘Deductible’, chosen as per your choice. For example, if you already have a basic health insurance for Rs. 5 Lakhs, you should opt for a 5 lakhs deductible. This means, you cannot claim from the top-up policy until your treatment expenses for a particular year reaches 5 Lakhs. But, once it reaches 5 Lakhs, your top-up policy will become active and you can claim further from the same.
Top-up policy is a good option when the probability of your exhausting the basic cover is remote, but possible. The premium cost of top-up policies are low compared to basic health insurance policies.
Hence, it will be cheaper to go for a 5 Lakhs basic + 5 Lakhs top-up instead of buying a health insurance policy for 10 Lakhs.
However, the terms of applicability of claims under a top-up policy varies with every insurer. So, it is important to read and understand the terms of claims admissibility before choosing the plans.