'If we fall ill, we often have to pay a hefty medical bill.' This is the (unfortunate) reality of today.
Thankfully, there is a good solution... buy a health insurance policy.
But this has one problem. A decent insurance cover of Rs.15-20 lakhs — which will pay across simple to serious illnesses — will be too expensive.
Thankfully, this too has a good solution... buy a combo of basic + top up policy.
For example, you can buy a basic policy for say Rs.5 lakhs cover PLUS a (Super) Top Up Policy for Rs.10-15 lakhs.
(Note: Please keep in mind the word 'Super' which is discussed later.)
For the present, note that we are simply 'topping up' a simple basic policy (having a smaller insurance cover) with another policy (with a higher insurance cover).
Operationally, both the policies are exactly the same. They will pay for the hospitalization expenses as per the terms of the policy. [The basic policy will be good enough to cover the costs of medical treatment of the normal illnesses. And, the 2nd i.e. 'top up' policy will come into play when there is a critical illness, resulting in much higher expenses on treatment.]
The only difference between the two is the 'deductible'... the amount up to which the claim is NOT payable.
For example, zero deductible means that the entire claim amount, as assessed, will be borne by the insurance company. Likewise, Rs.1 lakh deductible means that if the claim amount is Rs.3 lakhs, you will have to bear Rs.1 lakh cost and the insurance company will pay the balance Rs.2 lakhs.
So you typically buy a basic policy for say Rs.5 lakhs cover with zero deductible, and top it up with say a Rs.10 lakhs policy with Rs.5 lakhs as deductible (i.e. equal to the cover of the basic policy). This gives you a total cover of Rs.15 lakhs, which will be lot cheaper than buying a single policy of Rs.15 lakhs with zero deductible.
Why this is so?
Simply because higher the deductible, lesser is the insurer's liability. Hence, the insurance company is able to offer the cover at a lower premium.
Now we come to the 'Super' aspect, that I had mentioned earlier:
There are two types of top up health insurance plans viz. Top Up Policy and a Super Top Up Policy.
Discussed below is the difference between the two; and why you should buy a Super Top Up Policy and not just the Top Up Policy.
Top-up Health Insurance Policy
Under a Top Up plan, you are eligible for a claim only if a 'particular' illness costs more than the deductible amount.
Assume that you have a basic health insurance policy for a cover of Rs.3 lakhs. Plus, you buy a Top Up Health Plan for Rs.10 lakhs insurance cover, with a deductible of Rs.3 lakhs.
Case 1:
Suppose there is one illness in the family and its treatment costs you Rs.5 lakhs. Then, you will get Rs.3 lakhs from the Basic Plan and Rs.2 lakhs from the Top Up Plan. So far so good!
Case 2:
But, what if there are two illnesses during the year, which cost you Rs.3 lakhs and Rs.2 lakhs?
If that be so, you will get Rs.3 lakhs from the basic policy for the 1st illness.
However, you won't get anything for the 2nd illness from the basic plan. You have already claimed the maximum amount under the same for the 1st illness and exhausted the limit. So it won't pay you anything for the 2nd illness.
And, you can claim under the Top Up Plan only if the claim amount exceeds Rs.3 lakhs, which is the deductible under the policy. So, even the Top Up Policy won't pay you anything.
In other words, despite having two policies, you are exposed to the risk of dipping into your own pocket for certain medical treatment(s).
This problem is solved by the Super Top Up Health Plans.
By the way: There's no point in having a lower deductible. Firstly, it will increase your premium cost. Secondly, you are any way covered up to Rs.3 lakhs under the basic plan.
Super Top Up Health Insurance Policy
Under a super top up plan, you are eligible for a claim when the 'sum of all illnesses' exceed the deductible amount.
Assume that you have a basic health insurance policy for a cover of Rs.3 lakhs. Plus, you buy a Super Top Up Health Plan for Rs.10 lakhs insurance cover, with a deductible of Rs.3 lakhs.
Case 1:
Suppose there is one illness in the family and its treatment costs you Rs.5 lakhs. Then, similar to the case of Top Up Plan, you will get Rs.3 lakhs from the Basic Plan and Rs.2 lakhs from the Super Top Up Plan. Again, so far so good!
Case 2:
But, the key difference is when there are two illnesses during the year, which say cost you Rs.3 lakhs and Rs.2 lakhs.
If that be so, you will get Rs.3 lakhs from the basic plan for the 1st illness.
Again, you won't get anything for the 2nd illness from the basic plan as you have already claimed the maximum amount under the same for the 1st illness.
But, you can claim under the Super Top Up Plan because the deductible level of Rs.3 lakhs has already been achieved after the 1st illness... remember, here you have to consider the sum of all illnesses. So, the Super Top Up Plan will pay you Rs.2 lakhs for the 2nd illness.
In other words, in this case you don't have to incur any costs out of your own pocket.
That's the beauty of a Super Top Up Health Plan.
Yes, it will be somewhat expensive than the Top Up Plan. But it will be lot cheaper than a Basic Plan of Rs.13 lakhs.
All in all, a great way to protect your financial well-being, against the risk of medical ill-being.
VERY IMPORTANT
You need a Super Top Up Policy, even if you have a policy that restores the insurance cover back to the original amount (say Rs.3 lakhs in the above example) after the illness.
This is so because tyically the restored cover CANNOT be utilized for the same claim / illness. It is available only for a fresh new claim either for a different illness if the same person falls ill again (i.e. same or related illness is excluded) or for a different person.
VERY VERY IMPORTANT
Given the huge risk that illnesses, ailments and diseases pose to your finances, you MUST build a Strategic Security System Against Healthcare Expenses.
Thankfully, there is a good solution... buy a health insurance policy.
But this has one problem. A decent insurance cover of Rs.15-20 lakhs — which will pay across simple to serious illnesses — will be too expensive.
Thankfully, this too has a good solution... buy a combo of basic + top up policy.
For example, you can buy a basic policy for say Rs.5 lakhs cover PLUS a (Super) Top Up Policy for Rs.10-15 lakhs.
(Note: Please keep in mind the word 'Super' which is discussed later.)
For the present, note that we are simply 'topping up' a simple basic policy (having a smaller insurance cover) with another policy (with a higher insurance cover).
Operationally, both the policies are exactly the same. They will pay for the hospitalization expenses as per the terms of the policy. [The basic policy will be good enough to cover the costs of medical treatment of the normal illnesses. And, the 2nd i.e. 'top up' policy will come into play when there is a critical illness, resulting in much higher expenses on treatment.]
The only difference between the two is the 'deductible'... the amount up to which the claim is NOT payable.
For example, zero deductible means that the entire claim amount, as assessed, will be borne by the insurance company. Likewise, Rs.1 lakh deductible means that if the claim amount is Rs.3 lakhs, you will have to bear Rs.1 lakh cost and the insurance company will pay the balance Rs.2 lakhs.
So you typically buy a basic policy for say Rs.5 lakhs cover with zero deductible, and top it up with say a Rs.10 lakhs policy with Rs.5 lakhs as deductible (i.e. equal to the cover of the basic policy). This gives you a total cover of Rs.15 lakhs, which will be lot cheaper than buying a single policy of Rs.15 lakhs with zero deductible.
Why this is so?
Simply because higher the deductible, lesser is the insurer's liability. Hence, the insurance company is able to offer the cover at a lower premium.
Now we come to the 'Super' aspect, that I had mentioned earlier:
There are two types of top up health insurance plans viz. Top Up Policy and a Super Top Up Policy.
Discussed below is the difference between the two; and why you should buy a Super Top Up Policy and not just the Top Up Policy.
 |
| Top Up or Super Top Up? The choice is VERY clear... |
Top-up Health Insurance Policy
Under a Top Up plan, you are eligible for a claim only if a 'particular' illness costs more than the deductible amount.
Assume that you have a basic health insurance policy for a cover of Rs.3 lakhs. Plus, you buy a Top Up Health Plan for Rs.10 lakhs insurance cover, with a deductible of Rs.3 lakhs.
Case 1:
Suppose there is one illness in the family and its treatment costs you Rs.5 lakhs. Then, you will get Rs.3 lakhs from the Basic Plan and Rs.2 lakhs from the Top Up Plan. So far so good!
Case 2:
But, what if there are two illnesses during the year, which cost you Rs.3 lakhs and Rs.2 lakhs?
If that be so, you will get Rs.3 lakhs from the basic policy for the 1st illness.
However, you won't get anything for the 2nd illness from the basic plan. You have already claimed the maximum amount under the same for the 1st illness and exhausted the limit. So it won't pay you anything for the 2nd illness.
And, you can claim under the Top Up Plan only if the claim amount exceeds Rs.3 lakhs, which is the deductible under the policy. So, even the Top Up Policy won't pay you anything.
In other words, despite having two policies, you are exposed to the risk of dipping into your own pocket for certain medical treatment(s).
This problem is solved by the Super Top Up Health Plans.
By the way: There's no point in having a lower deductible. Firstly, it will increase your premium cost. Secondly, you are any way covered up to Rs.3 lakhs under the basic plan.
Super Top Up Health Insurance Policy
Under a super top up plan, you are eligible for a claim when the 'sum of all illnesses' exceed the deductible amount.
Assume that you have a basic health insurance policy for a cover of Rs.3 lakhs. Plus, you buy a Super Top Up Health Plan for Rs.10 lakhs insurance cover, with a deductible of Rs.3 lakhs.
Case 1:
Suppose there is one illness in the family and its treatment costs you Rs.5 lakhs. Then, similar to the case of Top Up Plan, you will get Rs.3 lakhs from the Basic Plan and Rs.2 lakhs from the Super Top Up Plan. Again, so far so good!
Case 2:
But, the key difference is when there are two illnesses during the year, which say cost you Rs.3 lakhs and Rs.2 lakhs.
If that be so, you will get Rs.3 lakhs from the basic plan for the 1st illness.
Again, you won't get anything for the 2nd illness from the basic plan as you have already claimed the maximum amount under the same for the 1st illness.
But, you can claim under the Super Top Up Plan because the deductible level of Rs.3 lakhs has already been achieved after the 1st illness... remember, here you have to consider the sum of all illnesses. So, the Super Top Up Plan will pay you Rs.2 lakhs for the 2nd illness.
In other words, in this case you don't have to incur any costs out of your own pocket.
That's the beauty of a Super Top Up Health Plan.
Yes, it will be somewhat expensive than the Top Up Plan. But it will be lot cheaper than a Basic Plan of Rs.13 lakhs.
All in all, a great way to protect your financial well-being, against the risk of medical ill-being.
VERY IMPORTANT
You need a Super Top Up Policy, even if you have a policy that restores the insurance cover back to the original amount (say Rs.3 lakhs in the above example) after the illness.
This is so because tyically the restored cover CANNOT be utilized for the same claim / illness. It is available only for a fresh new claim either for a different illness if the same person falls ill again (i.e. same or related illness is excluded) or for a different person.
VERY VERY IMPORTANT
Given the huge risk that illnesses, ailments and diseases pose to your finances, you MUST build a Strategic Security System Against Healthcare Expenses.