One of our customers at Ditto recently asked us, “Hey, I have a health insurance policy with a coverage of ₹10 lakh, but I want to add my child to it right now. I already have a family floater health insurance policy and want to expand my coverage. What options do I have?”
Here's what we replied – If you want to increase your coverage, there are two options:
- You can increase the base cover amount of your insurance policy or
- You can purchase a top-up or a super top-up (STU) with your standard insurance policy.
What are top-ups and super top-ups, and why have we suggested them? Can they substitute the additional cover in your base policy? How economical are they?
What are Top-Ups and Super Top-Ups (STUs) in Health Insurance?
Coming to the first query that started this article, a top-up is a health insurance plan that provides additional coverage once your standard health insurance policy is exhausted. They offer a high cover amount at a lower premium than increasing the base sum insured of your primary policy. While you can purchase it as a standalone policy, it’s also important to note that top-ups and STUs cannot replace them. Instead, it is prudent to use it as a supplement that kicks in when the base policy is exhausted.
However, there's a small catch since they’re offering a very high coverage at such a low premium. With a top-up policy, you had to pay a deductible every time you made a claim. While this was cumbersome, they did offer an exceptional coverage amount. This is why top-ups were the go-to choice a few years ago.
However, they slowly declined in popularity once super top-ups were introduced.
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What is the Difference Between a Top-Up and a Super Top-Up in Health Insurance?
The main difference between a top-up and a super-top-up is how the deductible is applied. In a top-up plan, the deductible applies every time you make a claim, whereas in a super-top-up plan, the total medical expenses in a policy year are considered for the deductible.
This means that once the hospitalisation expenses exceed the deductible amount, the super-top-up plan will be activated and cover the additional costs for claims made during the rest of the policy year.
| Basis | Top-Up | Super Top-Up (STU) |
|---|---|---|
| Definition | Provides additional coverage after the deductible is paid per claim. | Offers additional coverage after the deductible threshold is met for the year. |
| Deductible | The deductible is applied per claim. | The total deductible for the whole year is taken into consideration. |
| Effect on Premium | Top-up premiums are slightly lower compared to STU premiums. | More expensive than top-up premiums |
Let’s understand this with an example:
Ajay and Vijay bought the same policy with a sum insured of ₹10 lakhs from a top insurer in India.
Being wise, Ajay also bought a Super Top-Up with his policy, but Vijay only bought a Top-Up. Both allow them to access additional coverage of up to ₹50 lakhs, with a ₹10 lakh deductible.
If Ajay and Vijay are hospitalised multiple times a year, Ajay’s Super Top-Up will cover all the expenses once the total medical expenses in the year exceed ₹10 lakhs. At the same time, Vijay’s Top-Up will only cover the costs for each claim exceeding ₹10 lakhs.
Here’s how it will pan out if they are hospitalised 2 times in the same policy year:
| Particulars | Ajay (Super Top-Up) | Vijay (Top-Up) |
|---|---|---|
| Base Policy SI | ₹ 10 lakhs | ₹ 10 lakhs |
| STU/TU Deductible | ₹ 10 lakhs | ₹ 10 lakhs |
| STU/TU Cover Amount | ₹ 50 lakhs | ₹ 50 lakhs |
| Hospitalisation 1 | ||
| Bill Amount | ₹ 5 lakhs | ₹ 5 lakhs |
| Remaining Cover in the Base Policy | ₹ 5 lakhs | ₹ 5 lakhs |
| Hospitalisation 2 | ||
| Bill Amount | ₹ 8 lakhs | ₹ 8 lakhs |
| Base Policy Covers | ₹ 5 lakhs | ₹ 5 lakhs |
| STU/TU Covers | ₹ 3 lakhs | ₹ 0 |
| Out-of-Pocket expenses 🚩 | ₹ 0 | ₹ 3 lakhs |
Note: This assumes that the base policy does not have a restoration or a no-claim bonus.
As you can see, in the case of Ajay (super top-ups), the insurer also considered the previous hospitalisation for the deductible. Since the entire hospitalisation amount for the year was ₹ 13 lakh (₹ 5 + ₹ 8 lakh), the deductible threshold is met, and the super top-up covers the remaining ₹ 3 lakh. However, in the case of Vijay (top-ups), since no hospitalisation cost above ₹ 10 lakhs, it did not trigger the top-up.
Why should you opt for a Super Top-Up with your Health Insurance Policy?
By now, you can understand why super top-ups are recommended over top-ups. However, the question is, why did we recommend a super top-up instead of just increasing your base cover? To understand this, you need to delve into the pros and cons and know whether it suits your needs –
- What are the Advantages of Super Top Up Plans in Health Insurance?
Super Top Ups are a popular health insurance product. Their popularity is due to their numerous advantages at this price point. Let’s take a look at some more benefits of STUs:
- Cumulative Deductible: As you can see from the example above, with a super top-up, you only need to pay the deductible once per policy year.
- High Coverage at Low Premium: STUs offer very high coverage at a much lower premium than increasing the sum insured of your base health policy.
- Coverage for Serious Ailments: Should you be diagnosed with a serious ailment such as cancer or Alzheimer's, most standard health insurance policies would run out of coverage quickly. In such cases, STUs help cover the remaining cost of medical treatment at a nominal premium. This won’t burden you or your family when you need help and allows you to focus on recovery rather than finances.
2. What are the Disadvantages of Super Top Up Plans in Health Insurance?
Like any other financial product, there's a flip side to STUs also. Considering this is a financial product, you must also be well-versed in the downsides.
- Mandatory Deductibles: While deductibles are not usually recommended in standard health insurance policies, they are compulsory in top-ups and super top-ups. This can be a financial burden if you do not have sufficient coverage from your base policy to meet the deductible.
- Potential Restrictions: Some top-ups and STUs may have restrictions such as co-payment, disease-wise sub-limits, etc. Choose an STU within your budget that does not have these features to ensure you get comprehensive coverage.
By now, we have tallied all the pros and cons of super top-ups and have gained a reasonable understanding of why they have become so popular in the health insurance industry.
So, it's brilliant if you want to purchase a super top-up. However, this increasing demand in STUs has led to multiple insurers offering various super top-up plans. Read on to learn more about the top super top-up policies in 2024!
What are the Best Super Top Ups for your Health Insurance Policy in 2024?
Here are some of the best super top-ups offered by the top insurers in India:
- HDFC ERGO Medisure: Unlike most of HDFC ERGO’s offerings, Medisure STU is a modest policy. You can choose a cover amount from ₹ 10-20 lakhs, with a deductible of ₹ 4 lakhs or ₹ 5 lakhs. This STU can only be bought by people between 18 and 65. Medisure also offers a family floater option, where you can include your spouse and up to 4 children (until they turn 24 years old).
However, the HDFC Medisure super top-up policy doesn’t cover domiciliary or home-care treatments, has loading charges, and cannot port into this policy.
- Care Enhance: The Care Enhance super top-up has two variants, the only differences being the cover amounts and deductibles. Care Enhance 1 has a cover amount of up to ₹ 30 lakhs and a deductible in multiples of ₹ 1 lakh, whereas Care Enhance 2 has a coverage amount of up to ₹ 55 lakhs and a deductible in multiples of ₹ 5 lakhs.
Unlike HDFC Medisure, this super-top-up doesn’t have any loading charges. However, it does have a mandatory co-payment if purchased over 61 years old. This policy also does not cover AYUSH, domiciliary, or homecare treatments and has a PED waiting period of 4 years.
- TATA AIG Medicare Plus STU: This is one of the most comprehensive super top-ups available. The cover amount ranges from ₹ 3 lakh to Rs. 1 crore, with the deductible starting at ₹ 3 lakh and going up to ₹ 20 lakh. However, you must remember that this is only a super top-up, which is best bought with a full-fledged insurance policy.
- ICICI Lombard Health Booster STU: Health Booster is a super top-up offered by ICICI Lombard with no disease-wise sub-limits or room rent restrictions. It has a 20% co-payment clause, but only after you’ve turned 61 years old. The base sum insured starts at Rs. 3 lakhs and goes up to ₹ 20 lakhs, which is low, considering this is a super top-up. But unlike other super top-ups, this STU offers a 100% restoration benefit if your deductible is at least ₹ 3,00,000. The deductible ranges from ₹ 3-5 lakhs.
- Niva Bupa Recharge STU: Niva Bupa Health Recharge is among the top STU policies available in India in 2024. Its cover amount ranges from ₹ 7.5 lakhs to ₹ 95 lakhs, with a deductible ranging from ₹ 1 lakh to ₹ 10 lakhs. Niva Bupa imposes loading charges on this policy, depending on the severity of the pre-existing disease or based on your BMI.
However, unlike most policies, the Health Recharge super-top-up has a room rent restriction of a single private room and covers daycare, domiciliary, and Ayush treatments. So, if coverage for any of these types of treatments is a priority for you, Niva Bupa Health Recharge super-top-up is a good choice.
Things to Keep in Mind While Purchasing a Super Top-Up
- Deductible: The deductible need not only be paid out of pocket. You can also have another health insurance policy that pays for the deductible. You can also have your corporate policy to pay for it and claim the rest of the amount via your STU.
- Equate Base Sum Insured to STU Deductible: Ensure that the deductible you select for your super top-up is the same as the base sum insured by your standard health insurance policy. This lets you claim the STU as soon as your policy coverage runs out, and you won’t have any out-of-pocket expenses.
- Additional Restrictions: STUs also have loading charges, waiting periods, etc. You need to be aware of these and make an informed decision to avoid unpleasant surprises when making a claim.
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Conclusion
Super Top-Up Health Insurance Policies provide additional security for you and your family. They offer high coverage at a lower premium than increasing the base sum insured of your primary policy, which makes them an affordable solution for enhancing your health insurance.
However, it's essential to consider the mandatory deductibles and potential restrictions before purchasing a super top-up plan. Always compare different plans and choose the best policy that suits your needs and budget.
