Shiv Kumar, 31, a Noida-based techie, had a medical insurance cover worth Rs 200,000 from his employer. A few months ago, he met with an accident and had to be hospitalised. The treatment cost him around Rs 200,000. Despite having a corporate mediclaim cover, Kumar had to pay Rs 100,000 from his own pocket.
Due to high medical inflation, corporate medical insurance often does not cover the entire expense in case of a major disease or accident. Hence, employees should buy additional cover on their own, apart from the one provided by their employer. Depending on your requirement, you may opt for either a basic health plan, a top-up plan or a super top-up plan. Top-ups and super top-ups are available for both individual and family floater options.
The typical corporate mediclaim cover comes with a number of limitations. "The extent of coverage can vary from year to year in a corporate mediclaim cover. Some of these policies also impose conditions such as co-payments and other restrictions, especially in the years when their employee benefit costs rise. Top-ups and super top-ups too serve the purpose of supplementing or complementing an employer's group health policy very well," says Shreeraj Deshpande, head-health insurance, Future Generali India Insurance.
Financial planners suggest that you should have your own basic health insurance policy and not rely completely on the employer's policy. If you lose your job or decide to turn into an entrepreneur in your forties, you will be better off if you have your personal mediclaim policy. Getting one at an advanced stage can prove difficult. Once you have a basic policy and want to enhance coverage, then instead of increasing the sum insured of your basic policy you can opt for a top-up or super top-up cover.
A top-up cover becomes effective after you have exhausted the sum insured on your basic mediclaim policy. You need to choose a deductible for your top-up policy - the amount that you will have to pay out of your own pocket, or which your basic policy will pay for. The top-up policy will only pay for an amount above the deductible limit.
Super top-up plans offer a better deal than top-up plans. A top-up plan gets activated only when a single claim amount exceeds the deductible amount. Suppose that you have a top-up cover with a deductible of Rs 200,000. You fall ill twice during the year, and each time your hospitalisation bill comes to Rs 150,000. In such a scenario, your top-up plan will not get activated. If the hospital were to present you with a single bill of Rs 225,000, then your top-up plan would get activated and you would be reimbursed for Rs 25,000.
You can take care of this gap in a top-up policy by opting for a super top-up plan. With this plan, even if you were to get two separate bills of Rs 150,000 (so that the total during a year comes to Rs 300,000), the super top-up policy would reimburse you for Rs 100,000.
A top-up plan has limited cover for pre and post-hospitalisation expenses. But super top-up plans provide coverage of pre- and post-hospitalisation expenses, day care procedures, and pre-existing diseases after a waiting period of three years, just like basic insurance plans.
To opt for a super top-up plan, you do not need to have a basic health insurance policy. You can pay the deductible amount out of your own pocket.
Instead of buying a top-up or super top-up plan, you can also enhance the cover of your basic policy. But this is an expensive approach. "Premiums of top-up and super top-up plans are much lower than those of basic health covers since they come with a higher deductibility, and hence insurance companies consider them to be less risky," says Anand Roy, executive director and CMO, Star Health and Allied Insurance.
For a 40-year-old, HDFC's Health Suraksha, a basic insurance plan, with a sum insured of Rs 750,000 charges a yearly premium of Rs 9,172. On the other hand, HDFC's super top-up plan with a sum insured of Rs 700,000, and having a deductible of Rs 300,000 charges a yearly premium of Rs 2,207. "Buying a basic health cover and supplementing it with a top plan is the prudent way to combat rising health care costs in a cost-effective way and avoid out-of-pocket expenses," says Harjot Singh Narula, founder & CEO, ComparePolicy.
When buying a super top-up plan, you need to undergo a medical check-up only if you are above 55. "People who are about to enter the senior citizen category and have a limited sum insured in their basic mediclaim policy should opt for super top-up plans to get higher protection," says Rakesh Jain, executive director and CEO, Reliance General Insurance. Premiums paid for super top-up plans are eligible for income tax deduction under Section 80D.