You are well aware that your company’s health insurance is insufficient to keep up with medical inflation. You want to get an individual health insurance policy but it is too pricey. Or you currently have health insurance and want to increase your coverage, but the cost is preventing you from doing so. Should you remain with the cheaper employer-provided health insurance coverage, or is there an alternative?
The same query came into the mind of one of our policyholders and contacted us to clarify some confusion about the health insurance mediclaim policy. Sounding disturbed and confused, the person said that his family is covered under Tata AIG health insurance plans for the family. The insured sum amount was ₹5 lakhs, but he doesn’t think it was sufficient.
The source of his concern was his recent visit to the hospital when his relative was confined for 15 days following a vehicle accident at Gurugram. His entire hospital cost had already surpassed ₹15 lakhs by the time he was discharged. His relative had a health policy, but it was insufficient to cover his medical bills. He had to go into his money to cover his medical bills.
The person was troubled by his cousin’s condition, which made him realise that his own mediclaim policy coverage was insufficient. He couldn’t afford to acquire another mediclaim policy because he was already paying a total of ₹25,000 for all of its insurance plans. “Is there any way out?” he asked desperately.
There is, indeed, a remedy in the form of mediclaim top-up plans.
Top-up for Mediclaim: What Is It & How It Works?
Top-up for mediclaim is basically an extension of your health policy coverage that comes into play only when a single insurance claim exceeds the threshold level. The insurance includes a deductible, which implies that claims will be settled if they exceed a certain level.
For example, suppose an individual has a ₹5 lakhs medical insurance policy and a ₹15 lakhs top-up plan with a ₹5 lakhs deductible. If they have a medical bill of ₹10 lakhs, they may pay ₹5 lakhs with their individual medical insurance plan and the remaining ₹5 lakhs with their top-up plan.
Here is how the top-up for mediclaim works:
| Cases | Top-up Medical Cover |
|
Your Medical Insurance Policies |
Plan 1: A standard medical insurance plan with a coverage of ₹5 lakhs |
| Plan 2: A top-up plan of ₹15 lakhs with a ₹5 lakh threshold limit. | |
| Situation A | |
|
There is only one claim of ₹8 lakhs in a year |
Plan 1 will reimburse ₹5 lakhs |
| Plan 2 will reimburse ₹3 lakhs since the insurance claim has exceeded the threshold range | |
| Situation B | |
|
There are two different claims of ₹2 lakhs and ₹4 lakhs in a year |
Plan 1 will reimburse ₹2 lakhs when it comes to the first claim |
| Plan 1 will reimburse ₹3 lakhs (5-2) when it comes to the second claim | |
| Plan 2 won’t reimburse anything since the billing amount (that is ₹4 lakhs) hasn’t exceeded the threshold range of ₹5 lakhs | |
| Situation C | |
|
There are two different claims of ₹8 lakhs and ₹4 lakhs in a year |
Plan 1 will reimburse ₹5 lakhs |
| Plan 2 will reimburse ₹3 lakhs since the bill has exceeded the threshold range | |
| Plan 1 and 2 won’t be paying anything when it comes to the second insurance claim. While Plan 1 has already exhausted its coverage, the amount of the second insurance claim hasn’t exceeded the threshold range. | |
Top-up Plans: Benefits
There are several benefits that come with top-up plans. Some of them are as follows:
- Because these insurance plans have a deductible, insurers may protect themselves from minor hospitalisation bills, which are common. This benefit is handed over to policyholders through lower premium rates.
- It’s available to the individual as well as family health insurance plans.
- Because medical prices have risen rapidly, it is prudent to get top-up policies that can assist in coping with medical bills.
- The 1961 Income Tax Act (under Section 80D) provides health insurance tax benefits. Since top-up plans are supplemental health insurance plans, it too comes with tax benefits.
- You can purchase the coverage even if you do not have health insurance.
You may quadruple your health insurance coverage by just paying a double premium. It is recommended that each family member get individual mediclaim coverage and top-up as a family floater. It’s critical to examine the top-up coverage before purchasing the insurance since you do not want to wind up with a plan that will not cover future medical bills.
Winding Up
Medical expenditures may rise if the inflation rate rises. From hospitalisation to medications to numerous diagnostic procedures, the expenditures appear to be rising with each passing year. Given today’s growing healthcare expenses, top-up plans are a must, and ignoring them might cost you a lot of money.
If you have another mediclaim policy or corporate health insurance and believe it is insufficient, the top-up policy is an excellent alternative. Keep in mind the threshold limit, since many plans do not produce results until this level is exceeded. If you have any question in your mind regarding top-up plans, you can reach out to Tata AIG at any time and get your queries answered in minutes. We are always ready to help you.
