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Top up policy is like an add-on policy to your existing health insurance

Monday, May 02, 2011

manoJ aswani
is VP at MyInsurance Club.com

I already have a mediclaim health insurance policy for myself and my entire family, but my agent is insisting that I go for one more policy, given the increasing cost of healthcare. Now, he also added that I should go for a top up policy and not a new policy from another company. What is a top up policy and is it advisable to go for the same?
— Harshad Meswani, Lokandwala Complex, Kandivali

Top up policy is like an add-on policy to your existing health insurance or mediclaim insurance policy. A Top up policy will take care of claims over and above the limit of your existing health insurance coverage. For example, if you have a mediclaim policy of Rs. 5 lacs and you take a top up policy of Rs. 2 lacs. Now, there is a medical cost which comes up to Rs. 6.5 lacs for which you will make a claim. Your existing policy will accommodate only an amount of Rs. 5 lacs out of the Rs.6.5 lacs. The balance Rs.1.5 lacs can be claimed under the top up policy amount. You can claim under a top up policy, only after you have exhausted the cover limit in your existing health insurance policy. The premiums for a top up policy are always low as compared to the basic mediclaim policy and hence off late many people have started buying the same. It is a good idea to go for a top up policy rather than spend a high amount of premium on taking another health insurance cover.

Why did some insurance companies de-list a number of hospitals from their network of hospitals? It is a little difficult to go through a list of hospitals that fall in your health insurance company network list and then admit the person there.
— Mukul Mishra, Malad West

There was an opinion that some hospitals have a different rate chart for customers with Mediclaim / health insurance policy, which is much more than that for customers without Mediclaim. This was leading to a claims payout made by the insurance companies against the premiums collected for the same, thereby leading to a huge loss in their health insurance portfolio. Hence the insurers were forced to create a preferred provider list, so as to curb the expenditure on them. Most medium and small scale hospitals have agreed to the rates offered by the insurance companies to remain on the preferred provider list and now quite a few large scale hospitals have agreed to them. The hospitals, who had or still haven’t agreed on the rate offered by the public sector insurance companies were excluded from the preferred list or the network of hospitals.

My age is 30 years and I want to start some small savings. Please suggest which policy is better in between Postal Life Insurance Santosh Endowment and Jeevan Saral with profit?
— Sejal Gupta, Ghatkopar West

Postal life insurance has not been updated for quite sometime now. The sum assured limit is Rs. 100,000 only. Also, the returns which can be expected are very low. Earlier, it was a good venue because the customers did not have much option of savings and getting good returns. Between the two, Jeevan Saral is surely a good choice. It has an option of monthly premium and provides a good sum assured too. The sum assured is 250 times the monthly premium.
LIC Jeevan Saral is a with-profit endowment assurance policy which means that it participates in the profits of the LIC’s life insurance business. The profits are shared in the form of loyalty additions which are terminal bonuses payable along with death benefit or maturity benefit

(The author is Vice President at www.MyInsuranceClub.com, insurance comparison website in India. You may write to him at [email protected])


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