Top Up Medical Insurance Policies in India

This is another post from the Suggest a Topic page, and in this post we’re going to take a look at top up medical insurance policies.

Before I start, I must admit that I came to know about the existence of this product only after the comment was left here, so I’m still learning about them.

What is a Top Up Medical Insurance Policy?

Top Up Medical Policies are offered to supplement your existing health insurance, and kick in where the current medical insurance policy stops.

So, if you have medical insurance for Rs. 4 lacs, and take a top up policy of another Rs. 6 lacs, then the insurance company will pay you anything over the initial Rs. 4 lacs that you insured for.

If you get a hospital bill for Rs. 6 lacs, then you will get Rs. 4 lacs from your first insurance, and Rs. 2 lacs from the top up medical insurance.

Top Up Medical Insurance in India
Top Up Medical Insurance in India

Every top up medical insurance policy comes with a “Threshold Limit”. The threshold limit is the limit after which the policy starts paying you. In the case I took above the threshold limit was Rs. 4 lacs – this means that your top up policy will only start paying you if your hospital bill is more than Rs. 4 lacs or the threshold level.

In the case of the top up medical insurance – you should reach the threshold every time to be eligible for payment.

So, if you have a second hospitalization, and you get a bill of only Rs. 3.5 lacs, you will not be eligible for claiming the top up insurance because each bill should exceed the threshold level.

There is however, another version of top up medical insurance called the super top up medical insurance which sums up what you have already paid in your multiple treatments, and then considers that value. So, if you went to the hospital twice, and paid Rs. 2 lacs each time, then it will consider that you have already paid Rs. 4 lacs, and if that was your threshold level, then you will start getting paid from the super top up policy from the next time. The time frame for this is usually a year after which the clock resets.

Now let’s take a look at some other points about them.

Top Up Insurance Policy Covered Under Section 80D

The top up policy is also covered Section 80D. It covers hospitalization expenses, and generally excludes things that aren’t covered in your primary insurance policy.

You Can Buy Top Up Insurance From Any Company

You don’t have to be a customer of the same company’s primary insurance to buy a top up insurance. This means that you can buy top up medical insurance from United India even if your base medical insurance is from some other company.

It is not clear to me if you need any base medical insurance at all or not, but from what I read it seemed to me that you can buy top up insurance even if you don’t have primary medical insurance. That doesn’t sound right, but based on what I read this is what I think is the case.

Rationale Behind the Introduction of Top Up Medical Policy

They were introduced in India in 2009, and the rationale was fairly straightforward. Not many companies offered a big amount of medical insurance, and the top up policy gave you a way to get medical insurance in addition to what you already have.

Since then, the limits have been raised, and to the best of my knowledge the top up products still remain relatively lesser known.

The reason for this could be their lower premiums, which means that they are not pushed by agents as much as other products, or it could mean that it is cheaper to buy a Rs. 10 lac medical insurance policy than it is to buy a Rs. 5 lac medical insurance policy, and then top it up with another Rs. 5 lacs.

I don’t know the answer to that, and it’s probably not even a right comparison because of the way the threshold limit works.

The premiums that I saw on the prospectus of a few sites seemed low, but that’s just based on a cursory glance, and I haven’t done any research about them.

My initial feeling about this product is that it can be a good idea for someone who has a somewhat low medical insurance like say Rs. 5 lacs. Most of you are probably covered by your employers to some level, but it might make sense to beef that up if that’s the only medical you have, and especially if your parents or kids also come under the same thing.

List of companies offering Top Up Insurance

This is probably not the complete list, and if you know of other companies that offer this type of insurance then please do leave a message and I’ll update the post.

United India Top Up

United India Super Top Up

Star Health Super Surplus

ICICI Lombard Health Care Plus

Your thoughts?

Finally, I’ll be interested to hear if any of you have a top up medical insurance policy, and want to share your rationale, experience, or anything else that may be of benefit to others.

34 thoughts on “Top Up Medical Insurance Policies in India”

  1. I am having the oriental insurance policy, I want to take top up policy for 5 lakh.
    Give us the directions.

  2. Great information about top up health plans. I did never listen about these type of plans its very interesting like upgrade the credit car limit. I have been having HDFC ergo health insurance policy since last two years, and the claim is 3 lacs. Now I am thinking to purchase a top up health plan because now I have a small family. A thank you so much for your support.

  3. Dear All,
    Recently, unfortunately, i have to go for my bypass surgery ( OPCABG) in Asian Heart Institute, Mumbai
    Here the relevant question is as follows

    1. I have Rs. 5 lac family floater policy from United India insurance since 2003 in addition to Rs. 3 lac top up having 2 lac as threshold limit
    2. My hospitalization bill was for Rs. 5.3 lacs.

    The TPA has informed me that my claim has been settled with 70 % cap and sent me Rs. 3.5 lacs

    Now the following questions Arise:
    1. Why i have to pay for Rs. 5 lac S.A. if there is any such cap and why people should not aproach to IRDA to scrap such caps
    2. I am continuing the policy since 2003, when i remember that there was no such caps, as i am renewing the policy not buying a fresh one , so i feel there should be no such conditions enforced on a later date.
    3. Now with the top up of Rs. 3 lac having Rs. 2 lac threshold limit can i claim rest of Rs. 1. 8 lac covered under my top up policy and reimburse my whole of medical expenses.

    As a layman when one gets the medical insurance for any sum assured, he is under impression that up to that extent he will be reimbursed in case of hospitalization , but now a days there are hidden terms and conditions that nobody( Purchases and Seller agents) read / and or understand and even I personally witness that most of the agents are not aware of silent features of any policy. There emphasis is on only how they can sell the policy to the innocent public.

    I think IRDA must regulate and come forward to standardize the terms and conditions of various types of policies.

    PLease comment

  4. You should post a article analysing different Terms Plans as well Critical Illness covers offered by various insurance companies .

  5. Hi Manshu, am having medical insurance from office. Now thinking of taking medical insurance apart from office coverage. Please suggest if individual policy is better OR a family floater. Which works out better in the long run? Please guide.

    1. So your family is not covered in your office insurance at all? That can be a problem if that’s the case. See if you can get something that covers your parents (if they aren’t already covered in their insurance).

      1. Sorry for not saying that clearly. My family along with parents are covered at office. But am thinking of a situation when I’ll be out of job and will be too old to get a good medical insurance coverage. So am thinking of taking a medical insurance in parallel with office coverage. So which is better? Indivudal or family floater? Please guide.

        1. Okay, I’m sorry I didn’t get that initially. You know my knowledge about insurance products is quite limited, but with whatever little I know I think that while floaters are less expensive than individual policies – the higher price helps deal with certain things like if a large part of the insurance is used by just one member of the family then that will exhaust the floater and then there are limits to who you can add and also for how long you can renew the policy.

          What I personally did a few years ago (and this without much research) is to get my parents to buy medical insurance for them in addition to whatever cover they had with me and that way it was simple to track how much they are covered up to regardless of what I’m doing. I felt at ease doing that, though it may not be the best or most cost effective solution. You can think about these things, and make a decision. I wish I knew more to give you a more concrete answer but my knowledge on these products is limited.

          1. Manshu,

            To answer Radhika query, floaters are cheaper but has disadvantage of cover being utilized by single member as you have mentioned. Also the premium are always calculated on the person with highest age.So if parents are included, the premium for the floater policy will be calculated on their age irrespective of who is paying the premium.

            Hence, its always advisable to cover parents in different policies even from the angle of tax benefit since in a floater there is no bifurcation of premium. For other members many a times a combination of an individual and a floater works very good. For e.g. in a family of three with one child, an individual policy on the main member and floater for spouse and child gives you higher coverage with a little extra premium.Similarly in a family of four two different policies can be looked at. So with a premium difference of 2-3 k you can get double SA for all members.However, the extra premium will depend heavily on the age bracket of the family members.

              1. Dear All

                It was a privilege to go through the discussion by all of you. I need a help should we go for a top up plan with Larsen Turbo or any other company.

                Warm regards.
                Rashmi Kaul

  6. Thanks Manshu for covering this kind of item. This will help many people about this product. Incidentally i bought a Top -up policy last years from ICICI Lombard about which i came to know at the time of renewal of my exisiting policy.
    The premium amount works out lower for the same amount of top up policy as compared to the original amount of the policy.

    1. Thanks for your comment, and it seems like people who got insured and were looking to increase the cover later on might find it useful to explore top up policies.

  7. Folks, Thanks for these discussions. Agreed that Health care is a must and one should have significant cover for their families, especially in the wake of rising medical costs.

    Coming back to Top-Ups, my personal opinion is not favoring it, especially if you have a family cover.

    For example. If a person has a Family Floater of 4 Lakhs and he/she has 4 members in the family cover and has Top Up for another 6Lakh for each member. The way it works (which I got to know from ICICI agent) is that if one member is admitted and the bill goes to 5 Lakh, then the enter amount is covered consdering the threshold. In this case no other family member is eligible for the next claim as the base policy of 4Lakhs is already consumed, which according to me is a big risk and waste of money.

    I am still not convinced that Top-Up are useful for families, especially those who live in metros, where the hospitalization costs are significantly higher.

  8. Significant developments are happening in the Health Insurance sector in India. Health insurance portability, enabling individuals with health insurance policies of non-life companies to switch companies, came into effect from 1 October 2011. IRDA expects this to result in better products and services for policy-holders. Just like is the case with Mobile Number Portability, a policy-holder can switch over to a new insurer if he is dissatisfied with the existing company, taking along his no-claim bonuses and track records. However, to be eligible for portability, he should have held the policy for a minimum of one year. Interesting to see how the market will span out in near future.

  9. Thanks Manshu. This is a good post considering most people esp in India dont think about health insurance and feel its a waste of money. I have a health insurance cover for both my parents from the past 5-6 years from the time my dad went into voluntary retirement. They are disappointed that it does not cover non hospital bills and since they are healthy they think its quite a waste. They keep saying that we could have used that money on out patient treatments which they currently use sometimes and they say why spend so much when we dont use it at all. I keep telling them that till you dont need it be happy and if you really need and dont have insurance to pay for you will really regret not having. I am really tired of expaining to them why they need medical insurance. Imagine, when this is the attitute, telling them what they have is not enough and they need a top up..

    1. Funny thing about term insurance or health insurance is that if you opt for it,chances of claim arising are low…..We also take mediclaim for my father who is a senior citizen before 3 years.Though there was no claim in last 3 years,good thing is that very inportant surgeries and procedures can now be claimed now which were excluded for first 2 years of policy.
      About top up of mediclaim,I do not understand the concept.
      In general any one who have partly exhausted his SA will apply for top up ..If anyone have claimed in policy year,how can mediclaim company offer lower premium for extra sum assured which otherwise apply loading for policy renewals.
      Secondly,is there any difference in base premium of above policies from regular mediclaim policies?
      If anyone have exhauseted SA completely,can take top up?

  10. Guess we need to delve more into it… I thought it was the the other way round. Medical covers(including top-ups) primarily cover hospitalization and surgical costs, and they ideally would not cover illnesses which maybe chronic/terminal/do-not-require-hospitalization.
    And thats where riders like critical-illness/permanent-disability/etc come into picture.

    I maybe wrong; I’d appreciate if folks have more info on the same. btb BirlaSunLifeInsurance has a Term-insurance which also offers these health-based riders(the fineprint specifies upto how much of the Sum Assured from the Term Insurance can an individual have as the Rider’s Sum Assured)

    The term insurance premiums are nearly half of what a PSU like LIC offers but again BSLI is a private insurer and I’m quite apprehensive about their claim settlements/customer satisfaction(reminds me of one of the posts in this blog debating private v/s public insurers)

    Apart from BSLI, I havent really delved deeper, though I’ve seen most health-care insurers charging hefty permiums if one adds the critical illness rider. Do UnitedIndia/NewIndia/Oriental have a cover for critical illnesses?

    Thanks for your inputs…

    1. Dear Manshu /Navneeth,
      I will share a few thoughts of mine on this topic.
      1.Pure Term Insurance OR
      2. Term Insurance with the three usually offered riders namely,
      a. Accidental Death Benefit(ADB)
      b.Permanent Disability Benefit(PDB)
      c. Critical Illness Cover(CI Cover)
      I am 34 years old and have done a bit of digging on this topic and the answer seemed to be pretty clear.
      a.As far as ADB is concerned, please don’t go for a Term Insurance with Rider because currently, a better option is available i.e Rs 20 lac cover for a meagre annual premium of Rs 1,042 from Oriental Insurance!!!!! Most of the readers are not aware of it as
      a.Agents do not publicise it as probably they don’t benefit from it
      b.Oriental Insurance offers it selectively – I heard that it is proffered to High Networth Individuals (HNIs) though i am not one, i must admit!!!! So, tease your agent a bit, or sweet talk the girl with the goggles sitting at Oriental Insurance and she will cough up the details and lo presto, you have a wonderful cover!!!
      b.I would recommend that one takes an ADB with the Term Insurance as it comes with a slightly more premium which is worth considering the benefits offered.
      I have obtained one from KOTAK LIFE as they are having good payouts for the term insurance apart from LIC (as listed by Manshu in one of his postings earlier – and Thanks Manshu for helping me choose it!),has the lowest premium and for an amount of Rs 2000 or so extra, i get an ADB cover as well.
      c.It is not worth taking a CI Cover with a Pure Term Insurance policy because the Premium is gonna be SKY HIGH.So, go for separate CI cover offered by ICICI and other cos. I have taken a ICICI Crisis Cover policy paying an annual premium of Rs 15,000 (Rs 10,000 Sec.80D and Rs 5,000 Sec 80C ) which offers a Rs 10 lac payout for those 10 listed CI (with clauses for defining those illnesses mind you i.e Raised enzymes for those with heart attack etc which may not always be present). Here, i need to stress two points.
      1.ICICI is probably not having the cheapest premium but i went for their CI policy as i was convinced about their payouts
      2.CI cover is usually recommended (as i read from various sources) for those who are already having a Mediclaim in place and are nearing their late 30’s (although it maybe earlier for those with a family history of such illnesses). I am highlighting it because i took my CI cover in my late 20’s before i had a Mediclaim!!! and this was because i had panicked a bit as i had a positive family history…..

      If readers are benefited from the above, all thanks to Manshu for giving all of us a platform to share our thoughts…….

      1. Dear Vijay,

        This comment is even more insightful than what you usually have to offer! I think this is great information and will benefit a lot of people. I’m going to research this more and based on this comment – create a post around it.

        Thanks a lot! Much appreciated!

        1. Thanks Manshu. Btw, i wrongly wrote ADB instead of PDB while addressing the issue in b. Obtaining Permanent Disability Benefit along with Term Insurance is strongly recommended. Looking for your insights into the topic.

  11. Thanks for the post Manshu!

    Pardon me if I’m gonna digress a bit. Considering the scope of coverage of most medical policies, I’m wondering whether a top-up(especially individual-only policies) would always suffice real requirements? I’m hinting at the “rider-option” that a few insurance companies have started with term insurance policies(BirlaSunLife Protector plan for instance) which cover for critical illnesses (or permanent disabilities) while these illnesses are mostly excluded in the vanilla medical insurance policies. To Top-up or to opt for Riders?

    Please correct me if I’m wrong on any aspect, but I’m looking at insurance from the holistic perpective of Life AND Health (yup I’m mixing two things but still falls under the umbrella of risk coverage). More thoughts will be appreciated.

    1. Thanks for bringing that Navneeth – The way I look at it is that every hospitalization can rack up quite a bill, and if the critical illness rider only covers a few very serious illnesses then that may not be enough.

      In the past few years, we’ve had situations in our family where we had a couple of hospitalizations (nothing serious, and all okay now) but the bill was close to a lakh rupees at one time, and over that in another. The Mediclaim paid for it, but I don’t think it would have been covered under the critical illness riders of the term policies.

      So, I come from that perspective, and think that having medical is better, especially if your employer is not offering it to you already.

      1. Hey Manshu,
        I guess I created room for confusion in the earlier comment. No doubt medical cover is a must for anyone starting with risk coverage, I was wondering about the top-up v/s rider actually.
        If an individual has a plain vanilla medical cover of abt 5L, would a top-up or critical illness rider make better choice…
        Again yes, choosing any product/cover depends purely upon each indidual’s requirement and can never have a one-size-fits-all approach. But broadly speaking I was looking at covering for all probabilities while yes, frequency of hospitalizations also needs to be taken into account.
        Just privilged to be among the blessed who have such structures while a majority of Indians wouldn’t even have access to basic medical care (Just a thought that crossed my mind cos I was about to whine as to how India has a long way to go before our healthcare industry becomes mature and a time when we dont have to worry about choosing insurance products)

        1. Okay, I see I completely misunderstood the question – sorry about that. Well, yeah even in the case you’re mentioning I have a feeling it’s better to go for a top up than for riders because top ups will cover a broader range than riders. I haven’t done any research comparing the two but this is what I feel right now. Might be a good topic to dig deeper and see. Do you know the name of any term insurance company’s rider that can be used for such a comparison? – Thanks!

  12. Thanks for the post Manshu. Top-up policies can only be used over and above the main policy? OR they can be used as the stand alone policy? Is it a good idea to purchase it from 2 different insurers?

    1. Thanks for your comment Radhika – Top Ups will start paying you only after a certain threshold has been reached, so if you just have a Top Up with a threshold of say 3 lacs, and get a medical bill of 2.5 lacs – you won’t get paid anything at all. It’s only after you cross the threshold will you start getting paid.

      For this reason, I think it is better to have a plain vanilla medical before you get a top up. What do you think?

      1. Just to answer Ms.Radhika’s query, as Manshu has pointed out, it is perfectly fine to choose another company for your top up plan and here, probably, all that matters is the premium you have to pay and nothing else. So, one can go for the top up of a decent company with a low premium.

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