Opting for an insurance plan for you or your family has become a central part of financial planning. With health costs rising and the sense of a proper backup post pandemic, people are compelled to revisit their health policy and modify it to suit the requirement.
While there are many products available in the insurance market to insure your health needs, there are a few things which a consumer need to know to get full advantage of the policy.
Health insurance
Usually, when you buy health insurance, the plan you choose comes as a ‘Base’ or basic health insurance plan. It covers you against any medical contingency. In this case, you select a sum insured amount when buying the policy.
What is top-up in health insurance?
After a base plan is purchased, for example a cover of Rs 5 lakh, however, due to unforeseen circumstances the limit of this amount is exhausted, then a customer can opt for a top up to the base insurance plan. It acts as a protection against a base plan limit.
A top up health insurance plan provides additional medical coverage to an existing health insurance policy.
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A top up health insurance plan allows people to get their medical expenses covered even if they have exhausted the sum insured of their regular base health insurance policy.
It must be noted that the top-up works only after the insured has paid the deductible amount, which is mandatory.
In other words, a top-up health insurance plan enhances the degree of financial security you have against different health-related concerns.
How does top-up in health insurance work?
It works much the same way as your base health insurance plan, albeit with a lower premium burden, making 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 purchased as an additional cover with your basic health insurance plan. It is usually taken for a specific purpose such as a critical illness or a personal accident rider. On the other hand, top-ups can be purchased as a standalone plan.
It works when the claim amount is more than the current health insurance base policy’s coverage amount.
There is another option called super top-up plan. It works when repeated claims are made 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 while investing in Unit-linked Insurance Plans can also use top-ups, adding to the existing premium payment. By doing this, one can increase the investment component by paying an extra premium.
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