How A Super Top-Up Health Insurance Policy Can Lower Your Premiums

The health insurance coverage depends on your lifestyle, health condition, age, life stage, family medical history, and financial capacity. Experts recommend starting with a minimum coverage of Rs 30 lakh, as a family floater policy. However, this can result in substantially high premiums.

Sriram Jayaraman, a Sebi-registered investment advisor, says, “Hospital charges inflate by nearly 10 per cent annually, making a super top-up with a base plan a prudent choice.” This is because super top-up policies typically feature lower premiums compared to standard plans.

 So, what exactly is a super top-up policy?

Super Top-Ups

In this type of policy, additional coverage only kicks in once a predefined threshold level, known as the deductible, is exceeded. Deductibles represent the amount the policyholder must cover themselves or through another policy before the super top-up policy takes effect. Essentially, you pay the deductible, while the insurer covers the excess up to the sum insured limit.

Says Shashank Chaphekar, chief distribution office at ManipalCigna Health Insurance, “A super top-up health plan, as the name suggests, ‘tops up’ your existing health insurance plan by upgrading your cover amount to a higher one and kicks in when your existing cover has been exhausted.”  

To illustrate this, consider a scenario where you have a family floater health insurance policy of Rs 10 lakh and a super top-up policy of Rs 20 lakh with a Rs 10 lakh deductible. Suppose a family member's hospital bill amounts to Rs 17 lakh. In that case, the base policy covers Rs 10 lakh, and the super top-up policy covers the remaining Rs 7 lakh, only paying out above the deductible of Rs 10 lakh. Or, if your employer provides a health cover of Rs 10 lakh, you can purchase the same super top-up policy with a 10 lakh deductible.

But how will this help in reducing premiums?

Super Top Up: Reducing Premiums

“As the cover offered by a super top-up plan is less than that of a policy that starts from the ground up, it’s cheaper. A super top-up ensures you're better prepared to deal with health emergencies,” says Shashank Chaphekar.

Consider a family of three seeking a 30 lakh coverage considering both routes. Option 1: A standalone 30 lakh health insurance policy at Rs 35,000 annually. Option 2: A Rs 5 lakh base policy at Rs 17,000 and a super top-up policy of 25 lakh with a 5 lakh deductible at Rs 8,000, totalling Rs 25,000 annually. So here, the family can save Rs 10,000 in premium while getting the same Rs 30 lakh coverage.

But it is crucial not to confuse top-up policies with super top-up policies.Super Top Up: Reducing Premiums “As the cover offered by a super top-up plan is less than that of a policy that starts from the ground up, it’s cheaper. A super top-up ensures you're better prepared to deal with health emergencies,” says Shashank Chaphekar.

Consider a family of three seeking a 30 lakh coverage considering both routes. Option 1: A standalone 30 lakh health insurance policy at Rs 35,000 annually. Option 2: A Rs 5 lakh base policy at Rs 17,000 and a super top-up policy of 25 lakh with a 5 lakh deductible at Rs 8,000, totalling Rs 25,000 annually. So here, the family can save Rs 10,000 in premium while getting the same Rs 30 lakh coverage.

But it is crucial not to confuse top-up policies with super top-up policies.