Benefits of a Super Top Up Plan Compared to a Top Up Plan

Mukesh and Rakesh are college friends working together in the pharma industry. During a lunch break, Mukesh narrates his recent ordeal where he had to be hospitalised. Rakesh being quite naïve when it comes to knowing the difference between a top-up plan & super top-up plan asks the below questions to Mukesh to get a better insight:

1. What is a top-up & super top-up plan?
2. What could be the advantages of going in for a Super top-up over top-up plan?
3. Benefits differentiating the two types of plans available for quick remedy. 

Now, before we move on to read about the same – let us begin with a small step of learning about basic features of insurance policies. 

Key features of insurance 

• Coverage- Pre and post hospitalization costs, doctor’s consultation charges, room rent, meal expenses, ambulance charges, etc.
• Sum assured- The limit is pre-decided in such plans and claims can be made accordingly. 
• Factors affecting premiums- Sum insured, age of the policy seeker, type of diseases covered in the plan, risk exposure etc. 
• Plan basis coverage- Either individual plans can be bought or family floater plans including one’s family members can be purchased. In family floater plans the spouse, dependent parents and children can be included as members. 
• Income tax benefits – Income tax Act helps to provide deduction of the premium cost borne by the policyholder – the limit defined here is that to Rs.25,000 under section 80D in regular cases and up to Rs.50,000 in case of senior citizens. This limit is for the coverage of a plan being inclusive of self, spouse, children. 

Top-up Plans & Super Top-up Plans:

There is most certainly a need for high coverage wherever any policy holder seeks a top-up or super top-up plan. As we are looking to understand, 

• A top-up plan covers the additional cost beyond the existing medical policy i.e., the sum assured limit. 
• On the other hand, the super top-up plans are quite similar to top-up plans, except that in case of a top-up plan only a single claim above the threshold amount can be availed. 
• The one being secured by a super top-up plan can avail the entire hospitalization expense whichever is beyond the said threshold limit as benefit under the plan. 

These top-up/super top-up plans provide additional cost coverage at a reasonable cost, so it is wise to opt for one instead of going in for a completely new plan, which would be less economical.

An important term to understand here is the deductible.

• A deductible is pre-factorised and openly disclosed in the policy terms and conditions and it is only when the single claim surpasses the sum assured limit, the top-up plans come alive.
  
• The basic factor here is that the higher the deductible amount, the cheaper are the super top-up or top-up plans.
  
• Also, as a foundation, the primary policy amount does reduce the risk for the insurer too to a great extent. 

Let’s understand top-up plans and super top-up plans with examples. 

Mr. A recently got a reality check that his hospitalization cost could range anywhere between Rs.10-15 lakhs. Here are the options available.

1. Top-up plan: Mr A can opt for a top-up plan, then in case of hospitalization if the bill exceeds the sum assured limit of X amount, then only can he make a claim for the differential under the plan. However, since this is a per claim way of benefit then it is effective only once per financial year. 
   
2. Super top-up plan: The best and the biggest advantage of super top-up plans is that they do entertain multiple claims from a single policy holder. This makes it super convenient for them to adjust to their uncertain medical expenses without having to worry about taking care of the finances on their own.
   

Here, there is no maximum threshold involved or any per-claim conditions restricting the policyholder. This plan is most suitable for people prone to frequent illness. This helps to a great extent in critical diseases where the cost for them is way too high and often outside the affordability zone. 

Most senior citizens are secured under this plan by the family members; since after a certain age they require regular check-ups and treatments respectively. 

Advantage of Super top-up plans over top-up plans:

Let us look at a few scenarios and understand the difference between the two. 

The basic health insurance policy is of Rs. 2 lakhs and the said plans in consideration of Rs. 10 lakhs having the threshold limit of Rs. 5 lakhs. Here are two scenarios.

1. When a single bill of Rs. 8 lakhs is generated- The insurance plan would cover 2 lakhs out of basic health insurance policy and balance 6 lakhs out of the top-up plan. Whereas, super top-up would not be any different than the other as the single bill value is less than the total top-up plan value. Here you are indifferent.
   
2. When more than one bill is generated- Separate claims of 6 lakhs, 2 lakhs and 1 lakh made: Insurance will cover the minimum sum assured limit of 2 lakhs, top-up will cover the expense to the extent of 4 lakhs – as this bill amount exceeds the threshold limit of 5 lakhs. The balance of 1 lakh will have to be borne by the policyholder himself. 

In this case, if the policyholder has a super top-up plan, the first basic insurance plan will cover a bill of 2 lakhs. Then super top-up will kick in and settle the balance 4 lakhs of the first bill amount. Furthermore, super top-up will also bear the cost of the remaining two bills that is Rs.2 lakhs and Rs.1 lakh. This is because the total medical costs are exceeding the threshold limit of Rs.5 lakhs in that year. 

In addition to all the above benefits, the super top-up plans are also designed to cover the medical expenses arising out of COVID-19 for any patient:

• They provide the benefit of paying the deductibles only once a year and make multiple claims during the tenure.
  
• We also get to choose the limit of deductible as per our existing plan and the sum assured limit.
  
• The super top-up plan offers wider coverage for seniors and parents within an affordable premium range.
  
• It also provides the benefit of claiming annual medical check-up costs after completion of a certain duration of one’s insurance policy period. 

Hence, considering the above factors, it is ideal to go for a super top-up plan as it boosts the coverage without policy holders having to dig deep in their pockets. The entire process is quite streamlined and hassle free, so it becomes even more effective in times of need. The ultimate goal of securing oneself and our loved ones is conveniently met when the most suitable coverage is selected.