If there is one thing that COVID-19 pandemic has taught us, it is that nothing is certain. People have increasingly realized the importance of keeping an emergency fund and covering themselves adequately from health and life-related financial risks. 

You might be having health insurance already. Should you go for a top-up?

What is a top-up?

Top-up is additional cover that reimburses hospitalization costs after a threshold limit, popular known as deductible, is crossed. A deductible is the amount that the policyholder/insurer has to initially pay as part of a claim whenever it arises, while the rest of the bill is paid by the top-up insurer. 

For instance, if you have a basic health plan with a sum assured of Rs 5 lakh and seek additional cover for Rs 2 lakh. In this case, you can ask for a deductible of Rs 5 lakh and a top-up cover for Rs 2 lakh. The latter will kick-in whenever a claim exceeds Rs 5 lakh. 

However, one need not necessarily own a basic health plan to buy a top-up. You can ask for a deductible and also pay from your own pocket. 

Higher the deductible, the lower is the premium in a top-up plan and vice-versa.

When to buy a top-up?

With the rise in medical treatment costs, you need to evaluate if your cover is sufficient. Else top it up. 

Also, it is relatively cheaper to enhance your health cover through a top-up beyond a limit than seeking a higher sum assured. For a 30-yr old man, a medical cover for Rs 5 lakh comes at a premium of about Rs 8,000 annually. If he seeks a higher cover of Rs 15 lakh, then its annual premium becomes Rs 13,500 a year – or Rs 5,500 more. Buying a top-up worth Rs 10 lakh of sum assured with a deductible of Rs 5 lakh will incrementally cost only Rs 2,000 a year or a 64% saving. 

Types of top-up plans

There are two types of top-up plans – top-up and super top-ups.

Top-up plans kick-in on a per claim basis and if the claim amounts are more than the deductible. However, such claims are applicable only once in a year. In contrast, super top-up policies pay the amount even in case of multiple claims within a policy year once you have exceeded the deductible threshold. 

Let’s understand the difference with the help of an example. 

Supposing you opt for a sum assured of Rs 10 lakh and have chosen a deductible of Rs 2 lakh for both the top-up and super-top plans. If the first claim from your end is for Rs 4 lakh, in this case, you will pay Rs 2 lakh from your pocket (to the extent of deductible chosen) while the remaining Rs 2 lakh will be receivable as a claim from your top-up as well as super top-up insurer. 

Now, if there is  a second claim for Rs 6 lakh during the same year, in this case, the top-up insurer will further deduct Rs 2 lakh (yes, once again as deductible) and pay you Rs 4 lakh. However, the super top-up insurer will not deduct any amount and pay the entire Rs 6 lakh to you. So, the deductible is reduced only once during the year from your claims in case of super top-ups. 

Lastly, when there is a third claim for Rs 1 lakh, the top-up insurer doesn’t pay you anything, since it is lesser than the deductible amount. In contrast, the super top-up insurer pays the entire Rs 1 lakh to you. 

Pros and Cons

While super top-up has its financial benefits, it comes at a cost. Its premiums are usually higher than that of top-ups. 

So, consider the following: 

1. Multiple claims 

Does the insured stand the risk of getting hospitalized frequently and have poor health? Are they prone to critical illness/accidents? If the answer is in the affirmative, then super top-ups might be a better option, even though it comes at a cost. 

2. Financial dependence 

Also, when there are big financial liabilities on the family, it is wiser to choose the super top-ups.

The Flip-side

While top-ups are economical, one needs to make sure the basic cover is adequate. For instance, there might be caps on the room cost that will make the top-up cover useless. Moreover, buying a top-up doesn’t give you the additional benefits of a no-claim bonus. That’s because if you are porting to another insurer, no-claim benefits will be available only on the base health plan. 

Furthermore, some insurers might not give you a cashless facility in case of claims. 


Top-ups enable seeking higher medical cover at an affordable cost beyond a limit. Its variant super top-ups come in handy in case of multiple claims. Weigh the pros and cons before you top it up.