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Perfect recipe for your hospitalization costs!

Top up plans are generally taken over and above you regular mediclaim in order to increase your total sum assured.

Abhishek Kumar Singh

19 May 2010

Life is a race, if you don't run fast, you will be like a broken undaa

I guess everyone remembers these lines. And no points for guessing the movie. So none of want to end up being a broken undaa!

To win this race, we start running fast, then faster, and ultimately become the fastest racer. In the process we loose many things and one such irreparable loss is of our health. Most of the studies done worldwide show that the number of heart attacks in India is growing at an alarming paces and very soon we may be leading the pack.

So let's have a look at the numbers - India will have 62 million patients with heart diseases in India by 2015 as compared to 16 million in the US according to CADI (Coronary Artery Disease among Asian Indians) Research Foundation, California. Thus, the biggest risk to cover today for every working individual is of the hospital bills. Most of the health insurance companies offer a maximum sum assured of Rs. 5 lakhs. This looks good at a younger age but when you start ageing, then this cover may not be that attractive especially if you are staying in any of the major metros. .

To help you cope with your age and lifestyle related demands, a few general insurance companies offer top up and super top up plans which enable you to pay for the medical bills over and above your regular Mediclaim policies.

Lets look at them in details.

Top up plans Top up plans are generally taken over and above you regular mediclaim in order to increase your total sum assured. Lets see how does a top up plan works. Suppose you have a mediclaim of Rs. 5 lakhs and you buy a top up of Rs. 10 lakhs with a threshold of Rs. 5 lakhs. So your total sum assured goes up to Rs. 15 lakhs (Rs. 5 lakhs of mediclaim + Rs. 10 lakhs of Top up).

Suppose you get admitted in a hospital and the bill amount is Rs. 7 lakhs. In this case the first Rs. 5 lakhs will be paid by the regular mediclaim policy and the top up policy will pay the remaining amount, which is Rs. 2 lakhs. Thus the insurance companies pay your total hospital bill amount.

In case you get admitted to hospital during the same year and your bill comes to Rs. 8 lakhs. Now 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 hospitalization or you haven't renewed the policy.

Case 1: In case you have renewed the policy, again the Mediclaim will pay you Rs. 5 lakhs and the top up policy will pay you the remaining Rs. 3 lakhs.

Case 2: In case you have not renewed the policy, the first Rs. 5 lakhs will be paid by you and the remaining Rs. 3 lakhs will be paid by the top up policy.

Thus, a top up policy will pay you every time you get hospitalized during the term of the policy, over and above the threshold limit chosen by you while buying the top up policy. Please keep in mind that your bill should cross the threshold limit every time you get hospitalized to a maximum of the sum assured of the top up policy.

Super top up plan A super top up plan is very similar in structure to the top up policy. It is also taken to increase the total health insurance cover for an individual. There is a small difference in the working of both. Lets take the same example stated above. The first time hospitalization took place and the bill was Rs. 7 lakhs, the Mediclaim will pay Rs. 5 lakhs and super top up plan will pay Rs. 2 lakhs. The next time when you get admitted, and the bill crosses Rs. 8 lakhs, the super top up policy will pay you the entire Rs. 8 lakhs (as your sum assured was Rs.10 lakhs and you had only used Rs. 2 lakhs in the earlier hospitalization), and not Rs. 3 lakhs as in case of top up plan.

So in case, you are unable to renew the Mediclaim policy due to any reason after the first hospitalization, you won't have to pay any amount from you pocket as all the expenses will be take care off by the super top up plan..

These top up and super top up plans have come at a time when the medical costs are escalating at a very high pace. Thus a combination of a regular Mediclaim with a top up policy is the best option to take care of all your medical expenses arising out in future.