Should You Purchase Health Insurance With Higher Sum Insured Or Add A Top-Up Policy?

Here is a comparison that may help you comprehend the differences between the two if you are unsure whether to purchase a health insurance policy with a higher amount insured or stick with a basic sum insured and purchase a top-up plan on top of it.

Both choices offer advantages and disadvantages of their own

Higher sum insured health insurance plans are more expensive but offer greater convenience when requesting payment under the insurance policy. The entire amount insured can be easily recovered. Additionally, your whole sum covered would be easily transferred to the new insurer if you wanted to port your health insurance policy to a different insurer. ##

Particulars Higher sum insured plans Regular policy with top-up plans
Premium payments * The policy is expensive as the premium is higher compared to health insurance with top-up plans The policy is cost-effective as the premium is low compared to health plans with high sum insured
Claims payout * The claim process is simple, easy and cashless The process is easy but may or may not be cashless each time
Deductibles * Usually, a low deductible is payable if any A high deductible has to be paid before the top-up benefit commences
Policy porting to another insurer Porting is a very simple process Porting the total sum insured (base policy plus top-up amount) can be a tedious process

Choosing a top-up plan for health insurance

A top-up plan for health insurance also covers hospitalisation expenses, much like a standard indemnity health insurance policy. It is more affordable to expand your sum insured through health insurance top-up plans because the premium for a top-up plan is typically lower than what you would pay to increase your basic sum assured by the same amount as the top-up.

What owners of policies should do

You can choose a health insurance plan with a larger insured amount, but the annual price will go more. Instead, you might choose a normal or base health insurance plan with a sufficient sum covered that fits your budget (in terms of annual premium payment) and then choose a top-up plan with a deductible that is equal to the base or regular policy’s.

For top-up policies, the deductible is frequently rather large. Let’s say a customer purchased a base/regular insurance with an insured sum of Rs. 5 lakh and a health insurance top-up policy with an insured sum of Rs. 95 lakh. Then, the deductible for the top-up policy may commonly be Rs. 5 lakh. The base policy sum insured will then be paid out in the event of a claim up to Rs 5 lakh. The base policy will be applied in addition to the top-up policy if the claim is bigger. Let’s assume it is Rs 20 lakh.

It is therefore advised to have a base health plan with enough coverage and to designate the base health plan’s sum insured as the deductible amount in the health insurance top-up plan. In this approach, your base/regular health insurance policy would cover typical medical expenditures, and you may use the top-up plan if the cost of the treatment exceeded the base plan’s amount covered limitations.

In addition, it’s crucial to purchase a top-up plan from the same insurer you did for your base/regular health insurance policy in order to gain from top-up plans without any hassles.

Additionally, the continuity benefit is only paid out on the base policy’s insured total, not the top-up plan, at the time of porting. Therefore, it is crucial to fully comprehend what is top-up in health insurance and circumstances before selecting any of the insurance plans for porting.

* Standard T&C Apply

## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply

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.

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