Top up vs super top-up: Which health insurance plan should you go for?

In this article, we shall discuss whether an individual should choose a top-up insurance plan or a super top-up plan.

Many individuals are covered under health insurance plans either from their employer, family member’s employer, Central/State Government, group/community where they are a member, etc. But this may not be adequate due to the small coverage amount. Therefore, purchasing a personal health insurance policy with a top-up or a super top-up plan can be a definite asset. In this article, we will focus on choosing between a top-up and super top-up health insurance plan.

What is a deductible?

Before we discuss top-up and super top-up plans and how to choose between the two, it is important to understand the concept of deductible. A deductible is an amount that a policyholder must pay before the health insurance company pays the remaining amount. For example, assume your hospitalisation amount is Rs 2 lakh and there is a deductible of Rs 30,000. In this case, you will have to pay Rs 30,000 (deductible), and the insurance company will pay the remaining Rs 1.7 lakh.

What is top up in health insurance?

A top-up policy pays a claim only if the amount is higher than the deductible. For example, let us assume that Ajay has a base policy with a sum insured of Rs 4 lakh. He bought a top-up policy of Rs 6 lakh with a deductible of Rs 4 lakh. Thus, Ajay has a total cover of Rs 10 lakh under the two policies. In this case, the top-up policy will pay only when each claim amount is higher than Rs 4 lakh. 

If Ajay undergoes hospitalisation and the claim is Rs 5 lakh, the base policy will pay Rs 4 lakh, and the top-up policy will pay the remaining Rs 1 lakh. During the same year, if there is a second hospitalisation, and if the claim is Rs 2 lakh, Ajay will have to pay the entire amount from his pocket because the base policy will have been exhausted in the first claim. And the top-up policy will not pay due to the deductible clause as the claim amount is Rs 2 lakh (lower than the Rs 4 lakh deductible).

So, the important point to note is that a top-up policy considers each hospitalisation event separately and pays only if each claim amount is higher than the deductible.

Related: Group Health Insurance Vs Individual Health Insurance 

What is a super top-up health insurance plan?

A super top-up policy pays a claim only if the total amount of all claims in a year is higher than the deductible. Let us take the same example above. Ajay has a base policy with a sum insured of Rs 4 lakh. He bought a super top-up policy of Rs 6 lakh with a Rs 4 lakh deductible. So, Ajay has a total cover of Rs 10 lakh under the two policies. In this case, the super top-up policy will pay only when the total of all claim amounts in a year is higher than Rs 4 lakh. 

If Ajay undergoes hospitalisation and the claim is Rs 5 lakh, the base policy will pay Rs 4 lakh and the super top-up policy will pay the remaining Rs 1 lakh. During the same year, if there is a second hospitalisation and if the claim is Rs 2 lakh, the super top-up policy will pay the entire claim amount. The reason is, the base policy is exhausted in the first claim, and the total of the two claims is Rs 7 lakh, which is higher than the Rs 4 lakh deductible.

So, the important point to note is that super top-up health insurance plans consider all hospitalisation events in a year and pay if the total of all claim amounts is higher than the deductible.

Related: Best Health Insurance Plans For Single Moms

How top-up and super top-up insurance policies work?

Let us look again at Ajay’s case and see how both policies work.

Related: 8 Health Insurance Jargons Explained

Last words

A top-up policy considers the deductible separately for every claim, whereas a super top-up policy considers the deductible for the total of all claims in a policy year. Considering the medical expenses, if you are already suffering from a chronic condition and are vulnerable to multiple hospitalisations in a year, you may choose to go for a super top-up plan. If you are leading a healthy lifestyle and your diet, profession, etc., don't make you vulnerable to chronic illness/hospitalisation, you could go for a top-up health insurance plan. As per Policybazaar.com, the premium for Niva Bupa Health Recharge (top-up plan) of Rs. 15 lakhs with a deductible of Rs. 5 lakhs is Rs. 1,859. Similarly, the premium for Royal Sundaram Lifeline Supreme (super top-up plan) of Rs. 15 lakhs with a deductible of Rs. 5 lakhs is Rs. 6,914. The above premiums are for a family of 3 persons (husband - 40 years, wife - 35 years, and daughter - 5 years).