Why employees should take Super Top up health insurance?

Shailesh  is employed in an IT Company in Mahape and provided with group health insurance cover of Rs 3 lakhs  by his employer. He has realized that the cover is not adequate for meeting the increasing hospitalization expenses. He is also concerned that the current cover will not be available if he opts for a job change.Employers provide health insurance to employees under the group insurance. Group insurance is advantageous for excluding preexisting illness unlike the individual covers. But due to higher claims ratio faced by insurers, premiums are getting revised upwards or deductibles are being imposed during renewal of the policies. The deductible is the amount of expenses that must be paid   out of pocket before an insurer pay the claim. This has made employees vulnerable from both sides; the deductibles and ever rising   medical and hospitalization expenses.Faced with this situation, many employees have started taking additional individual/family floater health insurance policies without realizing that the health insurance policies are indemnity policies and the multiple insurers will share the claims in proportion to their sum assured. The premiums get aggregated and cost increase, but the sum insured does not get aggregated.

Top Up Policies

Top up policies covers cost after a certain threshold. The threshold is the deductible amount to be paid out of pocket or covered by a base policy. The deductible  is applicable for each claim. A claim of Rs 3 lakh under a Top Policy of Rs 3 lakh (Rs 2 lakh) will get only Rs 1 lakh as claim.

Super Top Policy

It is similar to Top Up policies. In case of Top up policies, the deductible is applied to every claim but in case of super top up policies, it is applied on an annual basis. It is superior to Top up policies. The premiums will be little costlier than Top Up policies but very affordable vis a vis the individual policies. 

Some Super Top Up premiums*(S A Rs 5 Lakhs; Deductible Rs 5 Lakhs)  (Amount in Rs)

Age

Apollo Munich

United India

Star Health

Tata AIG

30

1620

1900

3708

699

46

3690

2300

3708

1860

61

9255

2600

3708

2325

*Excluding service Tax

Options

It is advisable for the employees to take a super top cover with a deductible limit equal to the employer provided group cover.  In case of shailesh , he can take a individual super top up of Rs5 lakhs with deductible of Rs3 lakhs for each family member. Claim upto Rs 3 lakhs can be made under the group policy and hospitalization expenses beyond Rs3 lakh  can be claimed under the super top up policy.If the group cover gets discontinued either due to retirement or job change, he can  approach the current group cover provider to  provide similar policy of  Rs 3 lakhs to him. Alternatively he can take cover afresh upto Rs 3 lakhs and continue with the renewals of the super top up cover every year

Individual or Family Floater

It is advisable to go for family floater policy if the senior most member of the family is at the early stage of carrier say upto 45 years. Conversely opt for individual policies at advancing age say 50 years and above.

Last modified on Saturday, 30 August 2014 16:20

Prakash Praharaj

Shri Prakash Praharaj has a passion for excellence. He has been awarded two gold medals for securing top positions both in Graduation and Post Graduation in Commerce. He is an MBA with specialization in Finance and marketing. He has been awarded Diploma in Treasury, Investment and Risk Management besides CAIIB from the Indian Institute of Bankers. He is a Certified Financial PlannerCM from the Financial Planning standards Board, India (FPSB), affiliated to FPSB, Denver, USA and Certified Personal Financial Adviser from NISM. He is also a SEBI registered Investment Adviser vide Reg. no. INA 000000045 dated 2nd August 2013.His book "Your Every day guide to Personal Finance and Insurance" has been published by CNBC TV 18 in August 2015.

5 comments

  • Vivek Harshey

    posted by Vivek Harshey

    Sunday, 18 September 2016 15:39

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    Report
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  • sarita

    posted by sarita

    Monday, 25 August 2014 06:12

    Very useful artcle.

    Report
  • Srinibas Swain

    posted by Srinibas Swain

    Saturday, 23 August 2014 07:27

    Thanks for enlightening us on intricacies and usefulness of various health insurances.

    Report
  • Srinibas Swain

    posted by Srinibas Swain

    Saturday, 23 August 2014 07:26

    Thanks for enlightening us on intricacies and usefulness of various health insurances.

    Report

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