5 Benefits of Top Up Health Insurance Policy

Mrs. Seema had purchased a health cover of INR 3 lakh. Three years into the policy, she was diagnosed with a life-threatening disease. The hospitalization expenses amounted to INR 5 lakh. Sadly, her family had to make out-of-pocket expenses of INR 2 lakh. Her husband had to withdraw funds meant for their children’s higher education.

Had Mrs. Seema opted for a top-up plan to supplement her existing medical plan, her financial goals would not have been disturbed. In order to avoid such a situation, you may consider investing in a top-up plan over your current health policy.

Meaning Of A Top-Up Health Insurance Plan

Your current health insurance policy may not provide enough coverage to meet high hospitalization bills. Under such circumstances, you may have to purchase two insurance policies or increase the sum assured amount. A top-up plan helps increase the total cover value and expands the sum insured amount. This means that the insurance provider is liable to cover the balanced amount in case the threshold of the base policy is crossed.

Benefits Of A Top-Up Health Insurance Policy

Investing in a top-up policy offers numerous benefits. It helps reduce out-of-pocket expenses and you receive treatment at the hospital of your choice without having to worry about making financial arrangements.

Following are five major reasons to purchase top-up medical insurance plans.

1. Coverage Over and Above Your Base Plan

   This is the greatest benefit of a top-up health insurance policy. It provides the financial backup in case the limit of your base policy is exhausted. You are assured that your insurer will cover additional costs, thereby relieving you of the financial burden.

2. High Cover at an Affordable Premium

   The good news is that top-up plans come at an affordable rate. This means that you may avail of dual benefits of higher sum insured and low cost. This benefit, in particular, is highly advantageous for those in the older age group. The probability of falling ill is high for the senior population and a top up-plan would, therefore, be a viable option.

3. Combats Rising Medical Inflation

   Medical inflation in India is increasing by the day. According to statistics, medical inflation in India is around 20% as compared to 8-9% in the past few years. Investing in a top-up health insurance policy helps you combat such inflation effectively. You may simply pass on the risk to your insurance provider and reduce your financial burden largely.

4. Coverage Against Pre-existing Diseases

   Generally, health plans do not offer coverage against pre-existing diseases. However, you may supplement your base plan with a top-up that offers coverage for the same. This proves beneficial in case you have a family history of certain illnesses such as hypertension or diabetes.

5. Tax Benefits

   Like any other medical insurance plans, you may enjoy tax benefit on the premium paid towards your top-up policy. Under Section 80D of the Income Tax Act, 1961, you may reduce your tax liability up to a limit of INR 25,000. This is applicable for insurance purchased for self, spouse, and dependent children. Senior citizens, however, may enjoy a higher limit of deduction according to the Budget 2018. In case you are over 60 years of age, you may claim a deduction of up to INR 50,000. Medical plans, therefore, reduce your tax liability while offering you coverage at the same time.

   A top-up policy helps complement your primary policy and shields you from additional expenses in case of huge hospital bills. You may, therefore, buy health insurance plans online or through your nearest branch, and enjoy maximum coverage at the best price.