Assume you bought a medical insurance plan with a sum assured of Rs. 5 lakhs in 2010. Since then, the costs of medical care have increased exponentially, so you decide to buy a better policy offering higher coverage. Instead of discontinuing your existing policy, you can opt for top up and super top-up health insurance plans. Let us understand how a top-up and super-top insurance policy work.

Top-up health or medical Insurance is an additional insurance policy that you can buy over and above your basic health insurance policy. When you exhaust the sum insured on your existing health insurance, the top-up policy helps cover additional medical expenses. With top-up plans, you may be able to file only one claim per policy year after paying the deductible.

Let’s say your existing health insurance plan’s sum insured is Rs 5 Lakh. You enhance it with a top-up health plan of Rs 15 Lakhs, making your total sum insured Rs 20 Lakhs. You then undergo a medical procedure costing Rs 10 Lakh. You will receive Rs 5 Lakh from your basic health insurance plan and Rs 5 Lakh from the top-up medical insurance.

A super top-up health insurance is similar to a top-up plan. If your medical expenses exceed the sum insured by your base plan, you can activate your super top-up policy to cover the additional costs. However, with super top-up plans, you can file multiple claims in a policy year after paying the deductible amount once.

For instance, you buy a super top-up plan of Rs 15 lakh over your base plan of Rs 5 lakh. Your total sum insured is Rs 20 lakh, and there is a deductible component as well. You undergo surgery costing Rs. 8 lakhs. In such a case, you can encash your base plan with a sum insured of Rs. 5 lakhs (including the applicable deductible). The remaining amount of Rs. 3 lakhs (and future medical costs) can be borne using the sums insured under the super top-up plan.

Deductibles are an essential component of medical insurance plans. It is a sum of money you must pay from your pocket before filing a claim. Only when you pay the deductible amount, the insurer pays the claim amount to the hospital.

Let’s say you need to undergo surgery costing Rs 1 Lakh. Per your Health Insurance policy, the deductible amount is Rs 20,000. Thus, you have to pay the Rs 20,000 first, and then the insurer pays the remaining amount of Rs 80,000. If the surgery costs less than the predetermined deductible amount of Rs 20,000, the insurer is not liable to pay anything.

Medical uncertainties and treatment costs are on the rise. These expenses can drain your savings. Having a health insurance policy can help you pay for such high costs. You must understand the terms and conditions associated with your medical insurance plan, such as waiting period, deductible, sum insured etc., before investing.