Regarding health insurance, top-up and regular health insurance plans are two prevalent options. While both provide coverage for medical expenses, there are some important differences. Regular health insurance offers comprehensive coverage for various medical expenses and hospitalisation costs. In contrast, a top-up health plan is designed to supplement your existing health insurance policy by providing additional coverage. This article will explore top-up and regular health insurance to help you make an informed decision.
Understanding Regular Health Insurance and Top-Up Health Insurance
- Regular Health Insurance Plan
Regular health insurance is a widely recognised type of health insurance plan that covers a broad range of medical expenses and hospitalisation costs. The plan is commonly offered by many insurance providers and is designed to cover various expenses, including preventive care, routine check-ups, hospitalisations, surgeries, and prescription drugs. However, regular health insurance coverage may be limited to certain medical procedures, and pre-existing conditions may have reduced coverage or may not be covered. Moreover, there may be a waiting period before coverage begins, which may be better for people who require immediate medical attention.
- Top-up Health Insurance Plan
Top-up health insurance or medical insurance top-up complements an existing policy by providing extra coverage beyond a specific limit. It is not a standalone policy and helps reduce the financial burden of medical expenses that exceed primary health insurance limits. Premiums are lower, but deductibles may be higher, and the amount can vary based on the plan and individual needs. Deductibles represent the out-of-pocket expense amount that must be paid before the insurance company covers medical expenses. The deductible amount may also vary depending on the plan and individual needs.
NOTE: When purchasing a top-up health insurance plan, it is important to consider the deductible limit and how it is applied carefully. Some top-up health policies apply the deductible limit once a financial year, while others apply it every time a claim is raised.
Comparing Higher Sum Insured Plans Vs Regular Plans with Top-up Plans
Suppose an individual wants to enhance medical coverage. In that case, they have two majorly options: to take a higher sum insured plan or top-up plans on existing regular insurance plans. The table given below gives comparisons of Higher Sum Insured Plans and Top-up Insurance Plans on various parameters:
| Parameter |
Higher sum insured plans |
Regular plans with top-up plans |
| Payout of claims |
The process is easy and cashless |
The process can be slightly tough and may not be cashless each time |
| Porting of policy |
Porting is very easy |
Porting regular policy plus top-up can be cumbersome |
| Deductibles |
No deductible or low if payable |
Normally high deductible has to be borne by the individual before the insurer comes into the picture. |
| Premiums on policies |
Premiums are quite high compared to premiums of regular medical insurance with top-up plans. |
Very reasonable as premiums are quite low as compared to premiums of the high sum insured plans |
| Limited increase in coverage amount |
Health insurance companies decide the limit they will allow their policyholders to increase coverage. |
Policyholders can decide their coverage amount with top-up plans |
| Waiting period |
Regular insurance plans may have a waiting period for certain specific diseases or any pre-existing ailments. One should carefully read the policy before signing and accepting. |
Like a regular insurance plan, top-up plans may have a waiting period for certain specific diseases or pre-existing ailments. One should carefully read the policy before signing and accepting. |
| No claim benefit |
If a policyholder does not make any claim during the year, the insurance company rewards them by either increasing the coverage amount or decreasing the yearly premium amount. |
Generally, this benefit is not available on top-up plans. However, there might be exceptions. It is always advisable to read the policy document in detail to understand terms, conditions, exceptions, etc., |
| Coverage type |
This policy provides coverage on its own |
These are bought as an extra to supplement an existing health plan. |
How do Regular Health Insurance Plans and Top-Up Insurance Plans work?
Let's take an example and discuss various scenarios to understand better the working of top-up insurance plans (medical insurance top-up) and regular medical insurance plans.
Suppose you have regular medical insurance of INR 10 lakhs and an insurance top-up (or additional health insurance coverage) of INR 10 lakhs. Let's assume the deductible amount in a top-up plan is equivalent to the sum insured in the regular health plan. The table below explains various scenarios and outcomes based on the abovementioned statement.
| Parameter |
Regular Health Insurance Plan |
Top-up Insurance Plan |
| Amount of Coverage (Sum Insured) |
INR 10 lakhs |
INR 10lakhs |
| Scenario 1: First claim of Y2022, i.e., INR 12 lakhs |
| The amount received by the Insured |
INR 10 lakhs |
INR 2 lakhs |
| Scenario 2: Second claim of the Y2022, i.e., INR 5 lakhs |
| The amount received by the Insured |
Zero, as the maximum limit of the regular plan, has been used |
Zero, as the deductible limit is INR 10 lakhs |
| Scenario 3: Third claim of Y2022 i.e., INR 12 lakhs |
| The amount received by the Insured |
Zero, as the maximum limit of the regular plan, has been used |
INR 2 lakhs, as the deductible limit is INR 10 lakhs |
| Scenario 4: There have been three separate claims of INR 4 lakhs, 6 lakhs and 8 lakhs in Y2023 |
| The amount received by the Insured |
The regular plan covers the first two claims because the total of the first two claims is equivalent to the regular insurance plan’s coverage of INR 10 lakhs. |
Since no individual claim is more than INR 10 lakhs, hence top-up plan will not reimburse any claim. Hence, the insurer must pay INR 8 lakhs from his pocket. |
Regular health insurance offers comprehensive coverage for various medical expenses and hospitalisation costs. In contrast, top-up health insurance plan is designed to supplement your existing health insurance policy by providing additional health coverage. Benefits of top-up medical insurance include additional coverage and reducing out-of-pocket expenses by paying affordable additional premiums. When considering a top-up health plan, it is important to consider the deductible limit and how it is applied carefully. The recommendation is to have a basic health insurance plan that provides adequate coverage and use the sum insured in the regular health plan as the deductible amount in a top-up plan. To avoid any inconvenience, it is essential to purchasing the top-up plan from the same insurer that provided the base plan.
