Be cautious while buying these insurance policies!
Well, the easiest way to increase your insurance cover, is to buy a top-up or a super top-up policy. If you don’t know how they work, read about them in under 3 minutes here. For those who don’t want to spare 3 minutes reading it, a top-up/super top-up policy is one where you buy an additional insurance policy (after your regular policy) but it has a given sum, known as a DEDUCTIBLE which the insurance company does not pay you. [However, I’d highly recommend to go through the earlier post for you to better understand this one]
Great! Now let’s start.
So premiums for top-up and super top-up policies are really low, which make it a good option to buy these policies if you want to increase your insurance cover.
However, it’s easier said than done.
Top-up and super top-up policies come with a lot of caveats that can cause problems while claiming insurance. Here are 4 things that you need to carefully consider while opting for a top-up/super top-up policy:
Top-up covers single hospitalizations, but super top-up covers multiple hospitalizations in one year (read more about it here). So it’s always better to buy a super top-up rather than a top-up policy, especially because the premium difference between both is not very high.
(Hereon, we’ll refer only to super top-up policies, as I personally would strongly recommend against a pure top-up policy)
As far as possible, buy the super top-up policy from the same company as the base policy, so that claims documentation is not a hassle. Now this is not a hard and fast rule. But if you have the base and super top-up policy from different companies, you’ll have to first claim from the base policy, wait for the amount to come to you and then submit the claim settlement letter along with documents to the second company, and then again wait for them to give you the money. Seldom will we see a complete cashless hospitalization if you are opting for two policies from different companies. It just makes things easier if both policies are from the same company, so that you don’t need to repeat the process twice.
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Avoid combining a family floater and individual policy for base and super top-ups. Either both should be a family floater policy or both should be an individual policy.
I personally faced a problem because of this recently. My father was admitted to the hospital a few months back, and we claimed the money from the base policy (which was a family floater), which then got completely exhausted with that claim. Now, my mother is also a part of the same family floater policy, so when she got admitted recently, we thought that we could claim the hospitalization from the super top-up policy. However, we were in for a shock, because the insurance company said that the super top-up was an individual policy, and irrespective of the base policy being a family floater policy (which covers both my father AND mother), since the amount was claimed for my father last time, and NOT my mother, they could not disburse the new claim, because it was on my mother’s name, and her super top-up was an individual policy, with a deductible amount of Rs. 5 lakhs, which was not utilized this year. Therefore, it’s always better to buy an individual base + individual super top-up. Or buy a family floater for both, so that anybody can use it. Not a good idea to mix floaters and individual policies. Also note that if it’s a family floater, the same people should be covered in both policies to avoid further hassles.
This is a very minor aspect that most people miss. Your base policy and super top-up policy should have the same duration, i.e they should start on the same date and end on the same date, otherwise it could cause a rare problem.
Here’s why:
Imagine that you have a 5 lakh base policy that gets renewed on 1st of May every year. And you buy a 20 lakh super top-up policy that gets renewed on the 15th of October every year. Remember these dates.
Now, say you get hospitalized in June 2022 and spend Rs. 5 lakhs on hospitalization. Pretty simple - you claim it from your base policy. Now your base policy is exhausted, but why worry? You still have your super top-up, right?
Well, in most cases, yes. But imagine a scenario if you again got hospitalized in December 2022, for whatever reason, with a bill amount of Rs. 4 lakhs.
Here, your base policy will not cover you, because you have already claimed Rs. 5 lakh in this year (starting 1st May for the base policy). But your super top-up duration starts from 15th October. And from 15th October, your total medical bills have only been Rs. 4 lakhs. So your super top-up won’t cover you either! This amount of Rs. 4 lakhs will have to go from your own pocket, just because you didn’t sync the time duration of both your policies. This is not a common occurrence, but would you want to risk the 5 lakh rupees just by not syncing the dates? I don’t think so :)
So yeah, that’s pretty much the important stuff you need to take care of, while buying a top-up or super top-up policy. While some folks would prefer to just increase the base policy cover instead of buying a top-up/super top-up, that may be an expensive proposition, or sometimes may not even be possible. So if you’re getting any top-up/super top-up policies, make sure you keep these checks before buying them!