Healthcare inflation is on the rise, and coverage must be updated. The sum insured may be insufficient to cover even one hospital bill in the coming years, let alone hospitalisation expenses in retirement. Because healthcare costs are rising, it is necessary to review and upgrade family health insurance plans or self-health insurance regularly to reflect known current costs and anticipated future costs.
Top-up plans supplement one’s primary health insurance and protect the buyer from unexpected costs. Here are five suggestions for making the most of health insurance supplement plans.
Calculate the cost –
Top-up policies can be purchased to supplement your employer’s group health insurance. If your employer does not permit you to purchase top-up coverage, you can always buy a top-up plan separate from the base plan, between Rs 2 lakh and Rs 5 lakh.
Choose wisely –
If your hospital bill is Rs 5 lakh, a policy with a deductible of Rs 3 lakh will cover the difference of Rs 2 lakh. However, if you are hospitalised twice a year and your bills total Rs 2 lakh each, your regular top-up plan will stay put. Every claim, that is, every hospitalisation, will be subject to the threshold deductible under a basic top-up policy.
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Even though the total bill exceeds the Rs 3-lakh limit, each hospitalisation falls well within the deductible limit. Using an online health insurance premium calculator can help identify these specifics and choose the premiums that seem affordable and necessary to you.
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A super top-up policy, on the other hand, totals all hospitalisation claims to determine the deductible limit. As a result, in the preceding example, because the total hospitalisation expense of Rs 4 lakh exceeds the deductible limit of Rs 3 lakh, the top-up plan will pay Rs 1 lakh. As a result, it is best to purchase a super top-up plan.
Recognise the deductible –
If one chooses a Rs 5-lakh plan with a deductible of Rs 2 lakh, the insurer providing the top-up plan will pay a maximum claim amount of Rs 3 lakh. To pay the deductible amount, the insured can either use the sum insured from an existing health plan or contribute from their pocket.
As a result, ensure that the deductible of the top-up policy is close to the sum insured in your primary health plan—individual or group plan through your employer.
Advice: Use an online health insurance premium calculator to identify the deductible, add-ons and premiums to find the affordable costs while continuing to cater to your premium needs.
Stick with a single insurer –
The significant benefit of purchasing a top-up linked to an employer-provided policy is that the waiting period for pre-existing diseases (PED) is waived. Suppose an individual top-up is purchased from the same company as an existing family health insurance plan or employer-provided ones. In that case, some insurers will offer continuity in the PED waiting period.
Claim the tax deduction –
Section 80D allows income tax deductions for premiums paid on top-up or super top-up plans. If the premium is paid for a plan that covers the self, spouse, and children, a maximum of Rs 25,000 can be claimed as a deduction under Section 80D.
Another Rs 25,000 deduction is available for premium contributions to a health insurance plan that covers parents, and if the parents are 60 years or older, a deduction of up to Rs 30,000 is available
* Standard T&C Apply
** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
