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How Does Top-Up Insurance Work in Medical Insurance Policies?

A health insurance policy is the need of the hour. With rising medical inflation, the cost of being treated at a hospital may burn a huge hole in your pocket. In order to shield yourself against financial burden during medical contingencies, you may invest in a mediclaim policy. By doing so, you may enjoy financial security and have peace of mind knowing that you and your family are secured at all times.

Most health insurers provide the option of riders. Such riders, also known as add-ons or top-ups, enhance the coverage of your policy. You may, therefore, enjoy additional benefits by merely paying an additional price over your existing premium. It is a good way to increase your cover while keeping costs in check.

It is important to remember that the benefit of a top-up policy may be used only once the threshold limit of your existing medical health insurance plan is crossed. For example, you invest in a health policy of INR 5 lakh and your top-up policy offers coverage of INR 7 lakh. In an event that your medical expenses are INR 8 lakh, the base policy of INR 5 lakh is utilized. The balanced INR 3 lakh is then used from your top-up plan. Therefore, it is necessary to buy a rider that offers an adequate level of coverage as per your needs.

Benefits of a top-up plan

There are numerous advantages of purchasing a rider over your existing private health insurance plan. Following are three major benefits of doing so.

  1. Enhanced protection

You may enjoy greater coverage by investing in a top-up policy. It protects you against medical contingencies that involve greater costs. Due to enhanced protection, you may avail of financial protection at times when you need it the most.

  1. Cost-effective option

The good news is that you may avail of the benefit of add-ons at a nominal price. The Insurance Regulatory and Development Authority of India (IRDA), India’s statutory insurance regulation agency, has capped the premium cost of riders at 30% of the basic insurance policy. This limit allows policyholders to avail of benefits of a rider at an affordable rate.

  1. Other benefits

Besides the aforementioned advantages, a rider offers numerous other benefits. It is easy-to-purchase. Besides, you may buy your basic medical health insurance plan and rider from two different insurance providers without any hassles. You may also enjoy tax benefit of health insurance premium paid towards your rider as per Section 80D of the Income Tax Act, 1961.

Common types of riders

There are numerous rider options available in the market in order to enhance your coverage. Following are four common types of riders associated with a medical health insurance plan.

  1. Critical Illness Rider

A critical illness rider, also known as a dread-disease rider, offers coverage against critical illnesses such as cancer, organ transplant, kidney failure, and heart attack, among others. The list of critical illnesses varies from insurer to insurer and hence you may make an appropriate choice based on your needs.

  1. Maternity Rider

This add-on covers all medical expenses incurred during childbirth. Such a policy comes with a waiting period and hence it is imperative to purchase such a plan well before you begin to plan for a family.

  1. Hospital Cash

This type of medical health insurance plan rider offers a daily cash amount for the number of days you are hospitalized. This amount may be used in any manner you deem fit such as covering inadmissible hospital charges, X-ray costs, and travel expenses of accompanying family member, among others.

  1. Personal Accident Waiver

In case of an unfortunate event such as an accident during the policy term, the insurance provider is liable to pay the sum assured amount. You may claim the benefits of this rider in case of permanent partial disability, temporary total disability, permanent total disability, and even death.

A rider is an ideal option to cope up with the elevated treatment expenses. You may purchase such an add-on either through your nearest branch or through the Internet. Opting for an online health insurance rider offers a great deal of convenience.

By purchasing a health insurance rider, you may cover higher hospital costs without any hassles.

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