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Pay higher premium or additional top-up plan: Which is better to upgrade health insurance policies?

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The year 2020 inspired us to learn how to adapt to a new normal and at the same time re-evaluate our priorities. We all by now have understood the value of having optimum health insurance cover with an adequate sum insured that can help us during medical emergencies. Now, customers would be delighted to know that keeping their best interests in mind, we have launched One Crore Health Insurance called my:health Koti Suraksha. This policy is designed to cater your Hospitalisaton expense needs arising from medical emergencies, Major illness and Surgeries including COVID-19 treatment expenses, and is loaded with many other benefits. The plan is undoubtedly a must-have, but it’s natural to be confused about a few things like if you need such a massive sum insured amount or whether a top-up plan will help you match the same amount at a lower premium. Let’s discuss.

The need for a higher sum insured

First of all, let's quickly glance through the reasons we are evaluating our choices in the first place.  We all know how overloaded  our public healthcare system is and a recent  study  done by the Union Ministry of Statistics and Program Implementation revealed that hospitalisation for any ailment in a private hospital costs six times more than the expense incurred in a government institution. 

Difference between Base health insurance and a top-up

A base Health insurance policy will provide first assistance in case of hospitalisation. A top-up plan is an additional policy which also covers hospitalization treatment expenses, but only after a threshold amount is crossed. This threshold amount is called deductible and refers to the amount of claim that the insurance company would not cover. It has to be paid either by the policyholder or by the base insurance policy as the case may be. Once the threshold limit is crossed, the benefits of the top-up policy kicks in. This deductible makes the plan an economical option as the liability of the insurer reduces and allows the policyholder to increase the insurance coverage at a reduced premium. A top-up policy may have similar or different features, inclusions and exclusions than your base insurance policy When you opt for a Top Up Policy on a Base Insurance policy you will have to maintain two separate policies and you might also have to buy these either from the same insurer or separate insurer depending on the availiblity and the choice of sum insured and the deductible matching your need

What should you pick?

Some top-up plans have deductible per claim and pay only the amount exceeding the deductible amount in every single claim while Super top-up plans have aggregate deductible and allow multiple settlements up till the limit of the sum insured once the deductible amount is crossed in a single policy year . Other benefits, inclusions, and exclusions can be more or less similar in both the plans. The major difference lies in the premium, the deductible and to get the same sum insured. In the base health insurance, the premium is slightly higher than the top-up plan, but the base insurance policy get triggered immediately as and when medical exigencies   arise. The top-up plan is cheaper, but isn’t of any use till the deductible is crossed. Also, portability is easier in the base health insurance policy

Both plans have their pros and cons and the policyholder should choose either according to need and budget constraints. It’s best to discuss with the insurer and learn about the discounts and added features of both plans and then choose the one that provides maximum benefits.  

Conclusion

Life is a long phase of learning and unlearning and the year 2020 taught us pretty solid lessons. We all learnt to give more importance to hygiene as well as to have health insurance with extensive coverage. The sum insured, especially, was not just a number. It gave us the security that during medical emergencies, it will take care of all expenses, no matter how big. The launch of  One Crore Health Insurance  policy called my: health Koti Suraksha, designed especially to cover Medical emergencies, Major illness and ,surgeries, including hospitalization for coronavirus disease  and many other medical expenses, . The policy has multiple other benefits and becomes an essential asset. After reading this, it would helpful to decide whether a high sum insured is what you need or a top-up plan will help you sail through difficult times . 

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

HDFC ERGO General Insurance Company Limited. Registered & Corporate Office: 1st Floor, HDFC House, 165-166 Backbay Reclamation, H. T. Parekh Marg, Churchgate, Mumbai – 400 020. Trade Logo displayed above belongs to HDFC LTD and ERGO International AG and used by HDFC ERGO General Insurance Company Limited under license. For more details on the risk factors, terms and conditions, please read the sales brochure/prospectus before concluding the sale. UIN: my:health Koti Suraksha - HDFHLIP21131V012021 IRDAI Reg. No.146 CIN: U66030MH2007PLC177117. UID No. D2-33 terms & conditions apply

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