Health Insurance: Top-up vs. super top-up—Which one is right for you?

Do you know that you can enhance your health insurance cover significantly without spending heavily on premiums just with a base cover? Well, this option is called super top-up in health insurance parlance.

Super top-ups work well only if you have a base cover of at least ₹5 lakh- ₹10 lakh. If your claim amount exceeds the limit under the base cover, then super top-up will kick in to cover the remaining expenses.

With medical inflation continuing to outpace consumer price inflation, it is advisable to have a super top-up that boosts your health insurance cover to at least ₹1 crore ( ₹10 lakh base cover plus a super top-up of ₹90 lakh). Super top-ups work well because the premiums are quite affordable.

For instance, a ₹10 lakh super top-up for a family within the 35-year age bracket (two adults and two children) costs only about ₹4500 per year with leading insurers. But to buy an additional ₹10 lakh cover, the same family has to spend ₹10000- ₹12000 a year for a regular plan. Here are the benefits and the limitations of super top-ups in health insurance.

How does a super top-up work?

Super top-up works only when you have exhausted your health insurance limit. For instance, if you have a ₹10 lakh policy and have used it fully due to multiple admissions, then you can start using the super top-up. If you want to utilise a super top-up, you must have a base cover or pay for the expenses from your pocket. Expenses that you agree to spend on your own are pre-determined while buying the super top-up. But you should buy a base cover instead of spending money out of your pocket.

“Super top-up works on the principle of ‘policy deductible’, which is a predetermined amount you will bear through your own finances or any other insurance during a ‘medical event’,” according to health insurers.

Any amount over and above the policy deductible will be borne by the insurance company. But it is advisable to have both the base policy and the super top-up with the same insurer. Simply put, if you opt for an insurance of ₹1 crore (base cover of ₹10 lakh and a super top-up of ₹90 lakh), your medical expenses of up to ₹1 crore would be covered.

What is the difference between super top-up and top-up?

While health insurers also offer top-up plans, super top-ups are much better. Top-ups cover only one claim during the tenure of the policy. But a super top-up has no limits and you can get claims till the maximum amount covered is exhausted.

“A super top-up insurance policy takes many hospitalisations during the policy term into account,” according to Niva Bupa Health Insurance. A top-up plan lapses when the amount of the first claim is settled. But a super top-up lapses only when the whole cover is exhausted.

What are the disadvantages?

Super top-up policies with leading insurers come with a room rent limit. Insurers typically allow ‘Single private room with AC’ for super top-ups. Also, do watch out for the co-payment (co-pay) clause. Co-pay is a specific percentage that the insurer agrees to pay out of his pocket in the total claim. Some insurers have a co-pay of 20% for persons above the age of 61 for super-top ups.

Do remember that you have to buy two policies if you opt for a super top-up. While one can waive off the waiting period in the base policy by paying extra premium, no such facility is available in a super top-up. You have to serve the mandatory waiting period for pre-existing illnesses in super top-ups.

Super top-ups also do not offer any restoration benefits, a key advantage that refills the entire health insurance cover even if it is exhausted. They also do not offer a ‘no-claim bonus’ that rewards policyholders by adding a certain percentage of the sum insured if there are no claims during the policy period.

Many super top-ups have a sub-limit on the treatment of diseases. Sub-limits refer to monetary caps placed on certain treatments within a health insurance policy.

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.