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Buying Guide: How to get the Best Top up Medical Insurance Plan?

Why do you need a Top up Medical Insurance Plan?

  • You have not yet taken any health insurance policy.
  • You do have a basic/regular medical insurance policy with, say, X company but this company does not provide a top up cover.
  • You have a medical insurance policy but the sum assured is not significant to cover huge hospitalisation costs.
  • You want to minimise the premium amount.

It is not compulsory to have a health-reimbursement policy to buy a top up plan, but it is futile to take a top up policy unless you have a reimbursement cover equal to at least the ‘threshold limit’ of the top up plan. This way you will be able to take care of your bills even before the top up plan starts working. A top up plan can be taken even if you have a group heath cover from your employer.

 How does a Top up Medical Insurance Policy Work?

Unlike normal hospitalisation policies, top up plans come with a deductible or threshold limit. You have to select the threshold limit at the time of purchasing the policy – this is the amount up to which you or your existing policy can pay the medical bills. As long as your present ailment is fully met by your existing policy and the hospital bills meet the policy claim amount (through either cashless or reimbursement method), there’s no worry. The top up plan does not come into the picture here.

Top up plans work when your hospital bills show expenditure in excess of the medical insurance claim estimates cleared (either by in-house arrangement or through a third-party administrator) by the insurance company. In such a case, you can very well file an additional claim on the top up policy on the same hospital bills for treatment undergone.

A top up medical insurance plan covers hospitalisation costs beyond this specified limit (called the base amount policy).

Thus, basically a top up health policy is an additional coverage for people who have an existing individual medical insurance policy cover from the employer. Note that it is for reimbursement of expenditure that arises out of a single illness/hospitalisation beyond the limit of the existing cover, if any.

For all purposes, top up health plans are a backup to your medical insurance policy after you exhaust the sum-insured limit. A regular policy reimburses hospital bills up to the sum insured, while a top up plan covers costs beyond the specified limit. So, for a little extra premium, one may own a complete medical insurance plan.

What are the important technical Terms you should know before you buy a Top up for Mediclaim?

  •  Deductibles

Top up plans work on a cost-sharing basis where medical expenses up to the deductible limit have to be borne by the policyholder. In order to pay the deductible amount, the insured can either use the sum insured from an existing health plan or contribute from their own pocket. The insurance company bears the medical cost only if the expenses cross the deductible limit.

A deductible does not reduce the sum insured. It means the amount of hospitalisation expenses that you need to bear before the policy starts paying. You can opt for a limit that suits your pocket; the insurance provider will not pay you up to the deductible limit chosen by you.

Therefore, if you already have a health plan of Rs 2 lakh, you can opt for a top up policy of Rs 5 lakh with Rs 2 lakh as deductible. It means that the initial Rs 2 lakh will have been paid by your existing mediclaim and the remaining Rs 3 lakh will be borne by the top up for mediclaim..

  • Threshold limit

It is the level up to which your existing health insurance policy covers hospitalisation expenses. Beyond this level, the liability to provide medical cover lies with the insurance company that has provided you a top up plan.

  • Co-pay

It refers to the amount expected to be paid by you for medical services covered by the plan. In other words, co-pay means concurrent liability to pay a certain amount of your own contribution on a health policy to avail the health benefit up to the sum assured, subject to the type of policy or age restriction or other conditions enshrined in the policy. This is always at a certain percentage of the sum assured.

What is the role of Deductibles to make it the Best Top Up Medical Insurance Plan?

Unlike normal hospitalisation policies, top up plans come with a deductible or threshold limit. You have to select the threshold limit at the time of purchasing the policy, which is the amount up to which you or your existing policy can pay the medical bills. Only if your hospital bills cross the deductible limit can you use the top up plan. Thus, the only difference between a normal health insurance plan and a top up plan is the deductible.

Top up health insurance plans come handy when the threshold of the existing health cover is already used or exhausted and there are some more medical costs left to deal with, which would otherwise exert pressure on your financial savings.

For example, let’s assume that you have a top up health cover of Rs 10 lakh sum assured, with the threshold limit of Rs 3 lakh, in which case the policy will only cover your expenses beyond Rs 3 lakh. If your claim amount is Rs 8 lakh, the insurance company will pay you Rs 5 lakh (8 – 3), and not Rs 8 lakh. In a regular health insurance policy with sum insured of Rs 8 lakh, the entire amount of the claim – that is, Rs 8 lakh – will be paid. It is another matter that premium amount will be much more than that in a top up policy.

You must of course check deductible criteria for pre-existing disease, single illness, and pre/post-hospitalisation. Also, the higher the deductible, the lesser will be the premium amount (due to less insurance risk for the insurer).

What are the Exclusions and Inclusions of a Top up Medical Insurance Plan?

Additional benefits/covers provided by some top up plans (on payment of additional premium) include:

  • Personal accident cover
  • Critical illness cover
  • Hospital daily cash

 Discover the USPs of 10 Top up Health Insurance Plans 

What are the limitations of a top up mediclaim policy?  

  1. Buying a top up presupposes an existing basic mediclaim policy, which may not be the case with every consumer. There are many consumers who may still be debating in their minds about which policy to buy. In such a scenario, they may end up buying a top up policy with higher premium, compared to those who already have a basic policy and are going for a top up as well.
  2. While most of the claims under top up plans are considered in cashless mode (pre-authorisation is needed), most of the super top up plans work on reimbursement basis (post-hospitalisation period), not a cashless one. In case of the latter, the insurer will pay the claim amount after getting the details of all the medical bills, to assess whether the policyholder has paid the deductible limit by himself or through any existing health insurance policy.
  3. The basic top up plan covers only one hospitalisation claim (beyond the deductible limit) during the tenure of the policy, which may not suit everyone (for example, senior citizens who may end up being hospitalised for different ailments).
  4. Top up plans come into ‘play’ only when the claim is more than the deductible chosen by you. If your claim is within the deductible, there will be no claim to be filed with the insurance company, as the claim amount is to be met by you out of your own pocket or through the existing health insurance policy.


I have a health insurance policy of X company but they do not offer top up plans. What should I do?

You can buy the top up plan and the health insurance plan from two different companies, but it is advisable to buy these from a single insurer as it will save you money and time. If your basic policy and the top up policy are from two different companies, informing two insurers and getting the claim settled may be cumbersome.

Do all the general health insurance companies provide top up plans?

In the main, the insurance companies listed in the product comparison chart in this report offer top up plans. There are some others but their offers are not ‘transparent’ – something that you will realise while looking for information on their websites.

What is a super top up plan?

A top up cover will pay you for your claim amount (bill for a single hospitalisation). A super top up plan, on the other hand, considers ‘the total of all the bills’ in any given year. It covers ‘multiple’ hospitalisations and looks at the aggregate claim. This means the plan puts together several cases of hospitalisation to calculate the deductible limit (threshold limit).

Lessons We Learnt

  • Purchase a health policy early on in your life.
  • Demand/seek improved health cover/top up by keeping deductible limit to the minimum (this could depend on your health profile, age and fund affordability).
  • Seek maximum sum assured so as to pay only the minimum premium.
  • It is advisable for senior citizens to go for super top up plans even though the premium costs may end up being higher.

Consumer VOICE compared 10 top up health insurance plans to recommend the best Buy, Good Buy and Fair Buy. Brands compared include:  Apollo Munich, Bajaj Allianz, Max Bupa, ICICI Lombard, SBI General, Cigna TTK, Religare Health, IFFCO  Tokio, HDFC Ergo, Future Generali, Star Health, New India and United India. Read More.

Divya Patwal


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