Insurance Uncovered

We are a large group (about 500) of retired employees of a bank. Our employer has sponsored a group medical scheme, wherein hospitalisation treatment is covered to the extent of fixed cadre-wise limits (most of us are eligible up to ₹3,00,000). But in many cases where major surgeries or prolonged hospitalisations are required, these limits are proving to be inadequate. Kindly suggest how to go about getting some ‘top-up’ insurance to cover the excess expenditure over and above what is admissible under the group insurance.

Durganand

A top-up cover will definitely be helpful as the base policy covers expenses of only up to ₹3 lakh.

If you continue the policy with your past employer, you can go for a pure top-up or super top-up policy. But if it is available only for a limited period, it is advisable to look at hospitalisation plans that act as top-up covers; you also have the option to convert them into a full-fledged health plan in case of need.

Before you decide the plan, know the difference between a top-up and a super top-up plan.

In a top-up cover, your hospitalisation expenses need to exceed the deductible limit every time. ‘Deductible’ (or called the ‘threshold’ limit) is the portion of the hospital bill that you will have to fund from your pocket or from a medi-claim policy you have.

This example will make it clear: Say you have a cover for ₹3 lakh in your base health plan. Suppose you take a top-up plan of ₹5 lakh with ₹3 lakh deductible. Then, if you spend ₹2 lakh on hospitalisation in the year, the base policy will pay ₹2 lakh. If you get hospitalised the second time and the bill is ₹2 lakh, your base policy will pay ₹1 lakh, and for the remaining ₹1 lakh, you need to arrange funds.

The top-up plan cannot be used because you have not crossed the minimum threshold of ₹2 lakh (each time). But, if you had had a super top-up plan, it would have come in handy. Taking the same case, in your second claim, when the bill was ₹2 lakh, the base plan would have paid ₹1 lakh and the super top-up plan the balance ₹1 lakh, as you have crossed the threshold of ₹3 lakh on the whole (two hospital admissions).

So, it is suggested you look at a super top-up plan.

Check if your group cover insurer has a retail policy too and offers a top-up plan. If so, go for it.

Buying a top-up plan from the same insurer gives you continuity benefit on pre-existing diseases (PEDs). Note that a top-up plan is a fresh buy, so a new insurer will do fresh underwriting and you may have to go through the waiting period again. That said, even existing insurers may sometimes reject cover for PEDs or put a waiting period clause on top-up plans when you sign up for one, but the chances of them giving you continuity benefit are high. Given that yours is a large group, if you approach the insurer as a group, he may, in all likelihood, offer to cover the PEDs.

Otherwise, HDFC ERGO’s - my:health Medisure Super Top Up Insurance, is a good option. The product is priced very competitively compared to similar plans in the market. People up to age of 65 years can take this policy.

For a 60-year-old male, a ₹7 lakh policy, with a deductible of ₹3 lakh with HDFC ERGO, is ₹3,850 a year (without taxes).

You can also consider, Royal Sundaram Lifeline, or Apollo Munich Optima Super. These plans are full-fledged medi-claim policies with an option to sign up with a deductible. In Apollo Munich’s plan, the option to convert to a full-fledged indemnity health insurance plan is available at renewal between 55 and 60 years (provided you had renewed the policy without a break and had enrolled before 50 years).

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