What is a Top-Up & Super Top-Up in Health Insurance?

Have you ever wondered how you can enhance your health insurance coverage without significantly increasing your premiums? One of our customers faced a similar dilemma when they realised their base health insurance policy might not be enough to cover prolonged hospitalisation expenses.

This was when they approached Ditto for honest insurance advice, and we suggested purchasing a super top-up because their existing health insurance policy was already up to the mark.

Top-Up and Super Top-Up in health insurance plans can prevent this by providing extra coverage once your medical expenses surpass a specific limit.

In this article, we will introduce you to Top-Up and Super-Top-up health insurance plans and when you should purchase one.

What are Top-Ups in Health Insurance?

Top-up health insurance plans are insurance policies that provide coverage once your medical expenses exceed a specified limit, called a deductible. The deductible is the amount you must pay out-of-pocket for every claim before the top-up plan kicks in. These policies also won’t likely have any additional benefits, such as restoration or a no-claim bonus.

However, they do come with an incredibly high cover amount and an incredibly low premium. This makes it an attractive option if you want to increase your sum assured without spending too much on premiums.

Let’s understand this with an example:

If you have a top-up plan with a deductible of ₹10 lakh and a sum insured of ₹1 crore.

In the unfortunate event that you need to make a claim, let’s say for ₹25 lakhs, you need to pay the first ₹10 lakhs out of pocket or with another insurance policy, and the top-up will cover the remaining ₹15 lakhs.

HOWEVER, if you need to make another claim in the same policy year, you must pay the ₹10 lakh deductible again. And your insurer will pay the residual amount, if your bill exceeds the ₹10 lakh threshold.

However, paying deductibles for each claim might raise a doubt about how smart was this decision of availing a top-up plan for your health insurance policy? Subsequently, catering to this particular concern, a new product emerged - Super Top-Ups (or STUs).

What are Super Top-Ups in Health Insurance?

Super top-up plans are similar to top-ups. They provide additional coverage after a certain deductible limit is reached. However, there is one key difference here.

While a top-up plan considers the deductible for each claim, a super top-up plan considers the cumulative medical expenses during a policy year. This means that once your total medical expenses in a year exceed the deductible, the super top-up plan will cover subsequent costs.

Here is an example:

If you have a super top-up plan with a deductible of ₹10 lakhs and a sum insured of ₹1 crore, the plan will start covering expenses after your total medical bills for the year exceed ₹10 lakhs, regardless of the number of claims. So, you end up paying the ₹10 lakhs only once across an entire policy year, irrespective of the number of claims you raise.

What is the Difference Between a Top-Up and a Super Top-Up in Health Insurance Policies?

Here are the differences between a top-up and a super top-up summarised:

What are the Advantages and Disadvantages of Top-Ups and Super Top-Ups?

While top-ups and STUs can be purchased standalone, it is prudent not to do so. Purchasing a full-fledged health insurance policy first and then a super top-up is recommended. This is because top-ups and super top-ups have some disadvantages that standard policies do not. Let’s take a look at some of their advantages and disadvantages to decode this further:

Advantages of Top-Ups and Super Top-Ups in Health Insurance

1. Cost-Effective: Both top-up and super top-up plans are more affordable than increasing the sum insured of your base policy to the same amount. This is because of the high deductible these policies have, which activates coverage only after substantial medical expenses have already been paid.
2. Extended Coverage: They provide additional financial protection when your base policy's coverage is exhausted. This means you can avoid the risk of being underinsured and facing out-of-pocket expenses in case of extended hospital stays or chronic ailments.
3. Flexibility: You can choose a deductible amount that suits your financial situation. This allows you to balance a lower premium and a higher cover amount you are comfortable with.
4. Peace of Mind: Having an extra layer of coverage provides peace of mind, knowing that you have sufficient insurance to cover substantial medical expenses in the unfortunate event of a major hospitalisation.

Disadvantages of Top-Ups and Super Top-Ups in Health Insurance

1. Deductible: You need to cover the deductible either out-of-pocket or through another insurance policy before the top-up or super top-up plan kicks in. This can be a financial burden if you do not have sufficient savings or your base policy does not sufficiently cover this amount, either because of a lower cover amount, sub-limits or co-payments.
2. Multiple Claims: With top-up plans, the deductible applies to each claim, which can be quite expensive if you have multiple hospitalisations in a year. This means you might end up paying the deductible amount multiple times. This can, however, be solved with super top-ups.
3. Coverage Gaps: There might be coverage gaps due to the deductible structure, especially if you have frequent but relatively small medical expenses that do not exceed the deductible. This is why it is important to equate the cover amount of your base health insurance policy with the deductible in the STU.
4. Multiple policies: Managing multiple policies (base policy plus top-up or super top-up) can be quite cumbersome, especially when coordinating claims and understanding the terms and conditions of each policy. However, this can easily be solved by using Ditto Insurance to purchase your policies. We simplify purchasing your insurance policy, help with on-time renewal, and assist you with claim settlement if you need it. Feel free to click on this link to book a free consultation.

While top-ups and STUs can't replace base policies, they can be an affordable option with a high cover amount if one has the financial bandwidth to pay the deductibles. Let’s now take a look at some of the top policies available in 2024.

Best Super Top-Up Health Insurance Policies

1. HDFC ERGO Medisure: Unlike most of HDFC ERGO’s policies, Medisure STU is a modest offering. 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).

Drawbacks: 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.

 2. 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.

Drawbacks: 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.

  3. Niva Bupa Recharge: Niva Bupa Health Recharge provides comprehensive coverage with a vast network of hospitals. It 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 body mass index. The Body Mass Index (BMI) is also considered because a higher BMI is associated with an increased risk of certain conditions such as diabetes, hypertension and other cardio-related ailments. On the other hand, a lower BMI is associated with malnourishment and an unbalanced diet. The ideal BMI is 18.5 - 24.9.

Drawbacks: 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.

Conclusion

While top-ups and super top-ups can be used as standalone health insurance, it is more prudent to purchase them along with a base health insurance plan to provide an extra layer of financial protection. While both top-ups and STUs extend coverage beyond your base policy, super top-ups (STUs) are more beneficial because you only need to pay the deductible once in a policy year if you make a claim.When choosing a top-up policy, consider your healthcare needs and financial situation and compare each plan's specific terms and conditions. If you still need help, feel free to contact an IRDAI-certified insurance advisor to find the best health insurance plan for you.