As the health care cost in India rise, lot of employers are
cutting back on the amount health cover they provide to employees and their
families. The employer provided health cover is often not adequate to meet the needs of the family. The typical health
cover required by a family of four in a tier-1 city is around 5 lakhs. Most employers on the other hand provide a
cover of about 2-3 lakhs. With a cover
of 2-3 lakhs, you have a 60% chance of overshooting this amount in case of
hospitalization. What can you do to enhance your cover?
TOP-UP
Plans
The best way to address this supplemental need is thru a
Top-UP plan(Also known as High-Deductible Plan). This is how a top up plan works. Let’s say you have a cover of 2
Lakhs from your employer under Policy A, but as a family of four in a metro
your need is 5 lakhs of cover. You can opt for a top-up policy, say Policy B,
that covers you from 2 lakh onwards upto 5 lakhs. This is lot cheaper than
buying an additional 3 lakhs mediclaim cover.
Let’s look at various scenarios in this case.
Scenario 1: Total
Claims is 1.5 Lakhs in the year.
In this case your employer policy, Policy A, pays for the costs.
You haven’t reached the 2 Lakhs limits so the Top-up Policy doesn’t kick-in.
Scenario 2: Total
Claims is 3 Lakhs.
In this case your employer policy, Policy A, pays for the first
2 Lakhs. As you have reached the 2 Lakhs limits, the Top-up Policy kicks-in.
The top-up policy now pays for 1 Lakh.
Scenario 3: Total
Claims is 7 Lakhs
In this case your employer policy, Policy A, pays for the first
2 Lakhs. As you have reached the 2 Lakhs limits, the Top-up Policy kicks-in.
The top-up policy now pays an additional 3 Lakhs taking your total claim amount
to 5 lakhs. At this point you have exhausted your top-up option. So you need to
pay the remaining 2 lakhs.
Should you have got a higher top-up? Next week I will
address the question of how much insurance you need.
Availability
Top up plans are a relatively new phenomenon in the market
started about five years back. There are limited choice in terms of the deductible
and cover you can choose. Good news is that it is growing.
Insurers offering top up plans today are:
1. United India Insurance Company
2. HDFC ERGO General Insurance
3. Apollo Munich Health Insurance
4. ICICI Lombard General Insurance
5. Bajaj Allianz General Insurance
6. Star Health Insurance
7. Chola Insurance
You can get details of the Top plans and premiums at
policylitmus.com
