Summary of this article
Irdai’s new master circular simplifies employer health insurance for salaried workers.
Insurers must share clear summaries of waiting periods, limits and exclusions.
Revised norms push faster cashless decisions and smoother claim settlements.
Continuity benefits allow smoother transitions when employees change jobs or plans.
With rising costs of healthcare, health insurance is a must.
That being said, there are consumers who feel health insurance products are too expensive and are willing to purchase top-up or even super top-up plans, regardless of whether they are fully aware of the additional risk exposure due to a deductible.
“Consequently, consumers must be aware of the significance of the deductible prior to and as a precursor to the purchase of these products, to ensure they are aware of the relevance of the deductible and the implications to their claims prior to purchase,” says Dinesh Mosamkar, senior VP - consumer underwriting, TATA AIG General Insurance.
Top-up and super top-up plans differ in how the deductible is applied. “The deductible is typically equal to the sum insured under your base policy, though you and your insurer may agree on a different amount,” says Bhaskar Nerurkar, head- health administration team, Bajaj General Insurance.
Top-Up Plan Example
If your base health insurance cover or deductible is Rs 5 lakh and your hospitalization bill is Rs 7 lakh, the top-up plan will pay the remaining Rs 2 lakh. If you have multiple smaller hospitalizations, such as two claims of Rs 2 lakh each, neither exceeds the Rs 5 lakh deductible. In these cases, the top-up plan will not pay, and only your base policy will cover the expenses.
Super Top-Up Plan Example
With an Rs 5 lakh deductible or base cover, if you have three hospitalizations of Rs 3 lakh each, totalling Rs 9 lakh, the super top-up plan will pay Rs 4 lakh after the deductible. Super top-up plans are especially useful if you incur repeated medical expenses in a year. Once your base cover is exhausted, the super top-up provides additional protection.
Additionally, obtain written confirmation from the base insurer regarding the settled amount. This document is essential when hospitalization costs exceed the deductible, allowing the top-up or super top-up plan to activate and provide the necessary financial support.
Checks When Your Base Policy Is with Another Insure
To ensure smooth claim settlement, the insured should keep all hospitalization records and promptly notify the insurer. “If the top-up or super top-up plan is with a different insurer, they must also be informed without delay. Timely communication speeds up processing and ensures accurate coverage under both the base policy and any add-on plans,” says Nerukar.
When a base policy resides with another insurer, financial overlap means more than identical wording/phrases.
“You should review the respective caps on room rent, disease-specific sub-limits, major exclusions, and waiting periods to determine how close they equate in cost impact,” says Arun Ramamurthy, co-founder, Staywell.Health.
If the limits differ substantially—for example, either a lower room rental eligibility or a more stringent sub-limit—then these differences can create proportional deductions at the time of claim assessment for the top-up policy.
“Before completing the purchase of a top-up policy, prepare a concise, comprehensive cross-policy comparison, thereby reducing the possibility of rejections and/or deductions at the claim assessment stage,” says Ramamurthy.
