It is no secret that medical expenses are constantly rising. While medicine has made tremendous advancements in recent times, you cannot overlook the steadily increasing medical costs. According to the Indian Health Insurance Report, the rate of medical inflation in India stood at 14% in 2021, the highest in Asia. Given the increasing medical costs, having adequate health coverage is a must. Especially for your parents, a high sum insured is necessary to cover the frequent claims that they might incur. Is their coverage sufficient? If it is not, it is time you increase your parents’ health insurance coverage. Let’s understand.
Increasing parents’ health coverage – the options
If your parents are already insured under a health plan, review the coverage. Try to increase the coverage so that their medical costs are optimally met by the plan. Here are two options for how you can do so –
Buying an independent health insurance policy
Your parents might have coverage under a group health plan sponsored by –
- Your employer
- Their bank
- Any other group that they are a part of
Though the policy would provide coverage, it might not be adequate. Moreover, the coverage would be contingent on them remaining a part of the group.
In such cases, investing in an independent health insurance plan makes sense. The independent policy would allow higher coverage, customisation and lifelong renewability.
(Check out some of the best health plans for your parents)
Enhancing the coverage at the time of renewals
If your parents have a personal health insurance plan, you can opt for a sum insured enhancement during renewals. This would immediately increase the coverage in the same policy. However, the waiting period would be applicable on the enhanced additional sum insured.
While these options help in enhancing the coverage, there is a dilemma of high premiums. Since your parents are older, the premium for an independent health plan or for increasing the sum insured might be high. Affording such high premiums might become a challenge. That is why you need a cost-effective solution that would enhance the coverage without burning a hole in your pockets.
You need a super top-up health insurance plan!
Super top-up health insurance plan – the concept
A super top-up plan is an indemnity-oriented health insurance policy. It helps in supplementing existing coverage at affordable premiums. The plan has a sum insured with a deductible of your choosing. If the total claims made in a year are below the deductible, the insurer does not pay any claim. However, once the total claims exceed the deductible limit, the company pays the excess claim.
Let’s understand with an example –
You opt for a Super Top Up Health Insurance plan with coverage of Rs.10 lakhs. The Deductible is Rs.5 lakhs. Thereafter, you incur the following three claims –
|Claim 1 – You incur a claim of Rs.4 lakhs||No claim payment||The claim amount is below Rs 5 lakhs, i.e. the deductible amount. Hence the super top-up plan does not pay for it|
|Claim 2 – You incur a claim of Rs.50,000||No claim payment||The total claim made up to this point is Rs.4 lakhs + Rs.50,000, i.e., Rs.4.5 lakhs. This amount is also below the deductible limit. As such, no claim is paid|
|Claim 3 – You incur a claim of Rs.3 lakhs||A claim of Rs.2.5 lakhs is paid||The total claim amounts to Rs.7.5 lakhs (Rs.4 lakhs + Rs.50,000 + Rs.3 lakhs). As the total claim is more than the deductible limit of Rs.5 lakhs, the excess claim of Rs.2.5 lakhs is paid|
So, in the third instance, the aggregate claims exceed the deductible and the super top-up plan comes into the picture. It pays the excess claim.
Benefits of super top-up plans:
Super top-up plans are useful because –
- They effectively increase the coverage level
- The premiums are quite low and affordable, because of the deductible threshold up to which claims are not paid.
- They also allow lifelong renewability
Using a super top-up plan for enhancing coverage:
Since super top-up plans have a deductible limit, they have lower premiums compared to normal indemnity-based health insurance plans. These plans work best when they are combined with existing coverage. The deductible of the super top-up plan can be equal to the sum insured of the existing coverage so that claims up to the deductible can be paid by the existing plan. Thereafter, claims exceeding the deductible would be paid by the super top-up policy
So, if your parents are covered under a group plan or have an independent policy of their own, you can opt for a super top-up plan for enhancing their coverage without the burden of high premiums.
Choose a deductible that matches the sum insured by the existing plan for the ideal coverage. For instance, if your parents have an existing coverage of Rs.2 lakhs, you should choose a deductible of Rs.2 lakhs. In such a scenario, the basic health plan would cover claims up to Rs.2 lakhs. Thereafter, if there is any additional health insurance claim, the super top-up plan would kick in.
Super top-up plans might have an entry age limit (usually 65 years). Above 65, very few or no plans might be available. So, it is recommended that you do not delay buying it for your parents. Opt for the plan as early as possible so that your parents can also wait out the waiting period.
(Find out which super top-up plan to buy)
The bottom line:
Use a super top-up plan to boost your parents’ health cover without hurting your pockets. Opt for an optimal sum insured so that if a medical emergency strikes, you and your parents would be financially secured.