Why should I buy a health cover when I am already covered by my employer? Why waste money on the extra premium? These are questions many financial advisors answer everyday — especially on the first meeting with their clients. Most advisors recommend buying an individual cover because there is a chance of losing the cover or going without a cover for sometime when one changes jobs. Also, they believe the quantum of cover offered by the company may prove insufficient in some cases. If the extra premium is the main reason you are ducking an individual cover, then consider buying a top-up plan to the existing corporate health cover.
Top-up policies are medical reimbursement policies with high deductibles. Put simply, these policies pay for expenses over and above a certain threshold. For example, say, over. 3 lakh, which could be the cover offered by your company. Suppose an individual meets with an accident and the treatment costs him . 5 lakh. He has a health cover of . 3 lakh from his employer and additional . 10 lakh top-up policy with deductible of . 3 lakh. In such circumstances, . 3 lakh will be paid by the policy bought by the employer and remaining . 2 lakh will be paid by the top-up policy. The top-up policy will pay for expenses upto. 13lakhif the sum assured is . 10 lakh with a deductible of . 3 lakh. If the top-up buyer does not have any other cover, s/he has to bear first . 3 lakh of medical expenses. Top-up covers are cheaper than full-fledged covers and come in handy should the policyholder exhaust the existing/group policy's sum insured. The premiums on such policies are lower than buying another standard hospitalisation policy by nearly 40.
Does It Make Sense?
Buying a top-up plan makes sense in two situations. One, you already have a health cover for a small amount of, say, . 1 lakh, but want to increase the quantum of cover. The sum assured would have been adequate back then. But now an individual should look at a sum assured of . 3-5 lakh, especially in the metro cities on the back of rising healthcare expenses. Back then, policyholders did not have too many options. But now an individual has choice to opt for a top-up and bridge the shortfall.
The second scenario is also linked to the quantum of cover, but from your employer. Some companies link the sum assured to the seniority of the employee. This means if you are at a lower designation, your cover also will be lower. Such low value policies can again be topped up with marginal covers to meet out of pocket expenses in case of hospitalisation. However, please note that it is always better to buy an individual health policy. "In case of a job change, such employee covers cease to exist. Hence, it is best to have at least a low value cover of . 1-2 lakh and top it up with a sizeable cover.
Good Substitute
According to experts, a top-up plan is always better than buying multiple health plan to increase the cover. "Holding multiple health insurance policies can be taxing for an individual, especially at the time of claim settlement. If the first insurance company does not return the original documents and bills on time, you may be denied of the claim settlements from other companies because of the submission clause with a stipulated period of time
You can also buy a top-up plan for your entire family using the family floater option. You can buy cover up to . 15 lakh, of course then the deductible goes up to . 5 lakh. A point to note is the top-up policy applies the 'deductible' criteria to each claim and not all claims put together in one year. For a three-member family, withtheseniormostmemberaged40,the premium for a top-up policy with sum assured of . 10 lakh and deductible of . 3 lakh works out to . 4,436 per year.
Sure, these plans are perfect for middle aged and senior citizens who otherwise have to pay an exorbitant sum to buy a fresh policy. But these top-ups also have a drawback. The downside is when there are many claims in a year and all are below the base policy limit, then the policy may not be useful. Despite this, these policies are worthwhile to buy, especially for people in higher age groups, where a normal mediclaim could be expensive.
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