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As you age, risks of hospitalisation increase. Top-up and super top-up plans can help you pay for expenses exceeding your mediclaim cover

For every working individual, the biggest risk to cover today is that of hospital bills. Most health insurance companies offer a maximum sum assured of Rs 5 lakh. This looks a good amount at a younger age, but as you age, it amount starts to look less and less adequate, especially if you are staying in any of the major metros. That's where the top-up and super top-up plans come in. These are offered by general insurers and cover you for hospitalisation expenses over and above the cover in your regular mediclaim policy.

Let's look at them in detail:

Top-up plans

Top-up plans are generally taken over and above your regular mediclaim in order to increase your total sum assured. Here's how it works: Say you have a mediclaim of Rs 5 lakh and buy a top-up of Rs 10 lakh with a threshold of Rs 5 lakh. Your total sum assured goes up to Rs 15 lakh (Rs 5 lakh of mediclaim + Rs 10 lakh of top-up plan). Now suppose you get admitted to hospital, and the bill comes to Rs 7 lakh. In this case, the first Rs 5 lakh will be paid by the regular mediclaim policy, and the top-up policy will pay the remaining Rs 2 lakh. Now, in case you are admitted again to the hospital in the same year and your bill comes to Rs 8 lakh. There may be two cases - either you have renewed your mediclaim policy as you had already exhausted the limit of the same during your last hospitalisation, or you have not.

If you have renewed the policy, again the mediclaim will pay you Rs 5 lakh and the top-up policy will pay you the remaining Rs 3 lakh. In case you have not renewed the policy, the first Rs 5 lakh (the threshold of your top-up policy) will have to be borne by you and the remaining Rs 3 lakh will be paid by the top-up policy. Thus, a top-up policy will pay you every time you get hospitalised during the term of the policy, over and above the threshold limit chosen by you while buying the plan. Please keep in mind that your bill should cross the threshold limit every time you get hospitalised, and your cover is restricted to a maximum of the sum assured of the top-up policy.

Super top-up plan

Similar in structure to a top-up policy, a super top-up also increases the total health insurance, but there is a difference in its working. Take the example stated above. The first time hospitalisation took place, the bill was Rs 7 lakh; the mediclaim will pay Rs 5 lakh and the super top-up will pay Rs 2 lakh. The second time, when the bill comes to Rs 8 lakh, the super top-up will pay you the entire Rs 8 lakh (as your sum assured was Rs 10 lakh and you had only used Rs 2 lakh in the earlier hospitalisation), and not Rs 3 lakh as in the case of a top-up plan.

So, in case you were unable to renew the mediclaim policy due to any reason after the first hospitalisation, you wouldn't have to pay any amount from your pocket as all expenses would be taken care of by the super top-up plan. Top-up and super top-up plans have come at a time when medical costs are escalating at a very rapid pace. Thus, a combination of a regular mediclaim with a top-up/ super top-up policy is the best option to protect yourself from medical expenses arising in the future.

Source : http://digital.dnaindia.com/