Top-Up Vs.Super Top-Upa

Introduction

Rakhi recently bought a Rs. 5 lakh health insurance cover for herself, despite her financial advisor's recommendation that she opt for a higher cover. A few months later, Rakhi was hospitalised and had to undergo a heart surgery. The cost of hospitalisation came to Rs. 8 Lakhs. Rakhi was forced to dip into her savings, something she might have prevented if she had purchased adequate health cover in the first place.

If, like Rakhi, you too have insufficienthealth insurance cover, it is important that you extend it so that there are no hassles in the future - in case you’re hospitalised. One of the simplest and cost-effective ways to extend your health insurance cover is by buying a Top-up or a Super Top-up plan.

Top-Ups And Super Top-Ups

Top-ups and Super Top-ups are like extensions to your base health policy that help you get a higher sum insured at a relatively low price. Both these plans come with a ‘deductible’ - the amount after which these plans begin to pay. So, as soon as your hospitalisation expenses exceed this deductible, these plans become active and start paying. Now, while both these plans may seem similar, they work very differently.

In this article, let's learn how both Top-up and Super Top-up plans work, how one differs from the other, and which one should you buy.

Let’s dive right in!

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How Does A Top-Up Work?

The deductible for a Top-up is calculated on the basis of each and every hospitalisation. This means that a top-up plan becomes active and begins to pay only if the cost of a single hospitalisation exceeds the deductible threshold.

Let’s understand how a Top-up works with the help of Roshni’s example.

Roshni has a base health plan with a sum insured of Rs. 10 Lakhs. She also has a top-up plan of Rs. 20 Lakhs with a deductible of Rs. 10 Lakhs. Let’s say she undergoes multiple hospitalisation in a year, where the expenses incurred are as follows -

Hospitalisation 1: 6 Lakhs

Hospitalisation 2: 8 Lakhs

Hospitalisation 3: 12 Lakhs

Hospitalisation 4: 4 Lakhs

Let’s see how these claims will be paid to Roshni by the insurance company.

Hospitalisation	Claim Amount	Who Will Pay?
Hospitalisation 1	6 Lakhs	Base Plan will pay the entire Rs. 6 Lakhs.
Hospitalisation 2	8 Lakhs	Base Plan will pay the available Rs. 4 Lakhs. Roshni will have to pay the remaining Rs. 4 Lakhs from her pocket. (Top-up will not pay anything because the claim does not exceed the deductible limit, i.e., 10 Lakhs.)
Hospitalisation 3	12 Lakhs	Roshni will have to pay Rs. 10 Lakhs from her pocket. Top-up will pay the remaining Rs. 2 Lakhs - because the deductible is surpassed.
Hospitalisation 4	4 Lakhs	Roshni will have to pay the entire Rs. 4 Lakhs from her pocket. (Top-up will not pay anything because the claim does not exceed the deductible, i.e., 10 Lakhs.)

So, total claims made by Roshni = Rs. 30 Lakhs.

Out of this, the amount she had to pay from her pocket = Rs. 18 Lakhs.

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Top-up Vs. Super Top-up: What’s The Difference?

	Top-up Plan	Super Top-up Plan
When Does It Start Paying?	It will begin to pay when a single claim exceeds the deductible.	It will start paying when the sum of all claims in a year crosses the deductible.
Premium	The premiums of a top-up plan are relatively cheaper than a super top-up plan.	The premiums are comparatively higher.
Out-Of-Pocket Expenses	Here, the out-of-pocket expenses will be higher. Because, the deductible is calculated for every single hospitalisation.	The out-of-pocket expenses will be less. Because, here, the deductible is calculated based on the sum of all claims during a year.

Which One Should You Buy?

You must always opt for a Super Top-Up plan, as it covers all the risks covered under a Top-Up plan and more. Top-Up plans can be very restrictive, and the use cases where they will work (one hospital bill above the deductible amount) are very few, even in the long term.

Always look for a policy that has an “annual deductible” or mentions “AOY”, which is short for “Any One Year”, instead of policies which have a claim level deductible or mention AOA - which is short for “Any One Accident”.