Top-up Insurance Policy!

Before you go for a top-up insurance policy: Things you should know!

Top-up Insurance Policy!

Health care is expensive and the cost of health services is increasing by the day. That is why treatment for an illness or a stint in the hospital can actually overshoot the sum insured promised by your health care policy. This is when a top-up insurance policy can come in handy.

What is a top-up policy in health insurance?

A top-up insurance policy is simply an add on to your regular health care scheme. You will need it when you utilize the cover that your policy gives you, but still need more coverage to continue or complete your treatment.  A top-up scheme allows you to increase the threshold limit. In the event of an illness, if your hospital bills exceed the threshold limit, then the top-up plan will be activated. That is why you have to carefully choose the threshold amount, keeping in mind, the sum assured of your regular health insurance policy.

A particular characteristic of the top-up policy is that it provides a single incident cover. That means it will pay the amount by which your hospital bill overshoots the sum insured of your health insurance policy for just one illness, and then it will become invalid.

A few things you need to know about a top-up insurance policy-

  • You can make a claim on both your health insurance policy and the top-up plan at the same time (but only for a single incident).
  • You can purchase the two plans from two different insurance providers. At the time of hospitalization, each insurer will pay up separately.

Are top-up plans profitable?

If you want to increase the amount that your health policy pays, then a top-up plan is a sensible option instead of purchasing another medical policy. If you go with a higher threshold level and higher deductibles, then this add-on is quite cheap.

Explanation of how top-up insurance policy works

Suppose you have a health insurance policy worth INR 5 Lakhs and you bought a top-up insurance policy of INR 10 Lakhs with a threshold limit of INR 5 Lakhs. 

  • If you run up a bill of any amount less than or equal to INR 5 Lakh, your health insurance policy will pay it.
  • Suppose your bill is worth INR 9 Lakh, then your health policy will pay INR 5 Lakh. Since the threshold level of your top-up scheme was INR 5 Lakh, that too will become operational and cover the remaining INR 4 Lakhs.

If you get two hospital bills, say for INR 4 Lakhs each, then your top-up plan cannot help you as each bill is below the threshold limit.


To make your health care plan truly reliable and ensure that you are not deprived of quality treatment because of a cash-crunch, consider getting a top-up insurance policy.

Enjoying the benefits of an Individual Health Insurance policy? It’s time to get initiated to Group Health Insurance:


  1.     121policy
Biomedical Waste Management

Biomedical Waste Management – A Looming Concern

Biomedical Waste Management

550.9 tonnes of medical waste is generated in India on a daily basis. Though there are protocols put in place for segregation and treatment, the implementation falls short in many instances. it’s important to first understand how Biomedical Waste is managed in India in order to deep dive into other related concerns. Here’s our white paper on this issue.

Know About Proportionate Clause in Health Insurance

Let’s uncover – The proportionate clause in health insurance!

The claim settlement of your medical policy may not go your way if you are not careful. It turns out that quite a lot of people are disgruntled with their policies because the claims were settled partially and they were left bamboozled. At the core of the problems lie the proportionate clause in health insurance, and the whole room rent sub-limit bind. Read on to know how you can escape without any glitches.

The proportionate clause in health insurance

Sub-limits are the segments that build up the entire sum insured (the payout of your health insurance policy). They signify the extent to which your policy will pay for different aspects of your treatment such as room rent, nurses’ or doctors’ fees, charges for surgery, price of medicine, etc. No matter how much sum insured you are entitled to, you cannot exceed the cap or the sub-limit.

For example, if your room rent sub-limit is INR 2000 per day, you should adhere to it. If it exceeds by even a fraction, you’d have to pay the excess from your pocket.

In other words, a percentage will be deducted from your sum insured to meet each of the sub-limits. You can structure the sub-limits any way you like. There are no strict IRDA rules on it. It all depends on your insurer. There are health policies that come without sub-limits. But they are much more expensive.

How to calculate proportionate deduction?

The room rent sub-limit is really the most important. That is because insurers benchmark the reimbursement of the other expenses to the room rent. Usually, you are advised to cap the room rent at 1% of the total sum insured.

If your room rent actually exceeds your sub-limit, it will have an adverse effect on the rest of the payment too. The insurer will calculate the percentage by which you have gone beyond the limit, and proportionately deduct sums of money from the amount set aside for other sub-limits. This is called the proportionate clause in health insurance or proportionate deduction.

Suppose your room rent takes up 25% more than what was allotted for it, all the other sub-limits will go down by 25%. So you are incurring quite a loss here because your insurer pays your sum insured partially.

Naturally, this crafty little trick causes a lot of aggrievement and resentment and makes people lose their faith in health insurance policies.

What should you do?

If possible, opt for policies that don’t tie you down with sub-limits.

If you have to purchase a sub-limit policy, then enquire if the room rent sub-limit has a bearing on the rest of the claim settlement. If yes, steer clear from it.


All health insurance policies clearly stipulate sub-limits (the ones that contain them). So read the fine print carefully. Consult insurance experts if needed. This is not something you should rush into. Ponder everything out before signing the dotted line.

Now that we have laid the foundation for your awareness about the proportionate clause, delve deeper and learn about some other nitty gritties of health insurance, from another one of our blogs on the same.



  1.     Economic times
Health Insurance for Parents

Looking to buy health insurance for parents? Read this first


With the state of the economy and astronomical costs of procuring health care, everyone requires a medical policy. If your parents are senior citizens who aren’t covered by any health policy, they need one right away. But, before you buy health insurance for parents, you need to ponder over a few important factors. Policy is as good as the perks it offers. Which one would fit your parents’ requirements? 

Your options

A family floater plan is an excellent idea but only if your parents are yet to reach their senior years. Also, these plans don’t cover pre-existing illnesses. And many stipulate an age cap. Others charge a high premium.   

If you have included your parents in a corporate or group insurance policy, then also you should consider a separate policy for them. Because the group insurance policy will cease being operational once you leave the company.

If your parents are in their 60s, they would benefit more from senior citizen plans. Many insurers in India offer specific plans targeted for the elderly that accommodate the unique needs of these people. Your parents can also utilize tax benefits amounting up to INR 50,000, thanks to Section 80D of the Income Tax Act. 

Confused with the options? To simplify matters, here are a few things you and your parents should go over. This would help you narrow down your list of potential health insurance plans. 

1. The age of entry

Most insurers put a cap on the entry age at 65 years. That means you will not be able to buy health insurance for parents once they are past that age. But not all insurers have this entry age stipulation. You need to hunt down this kind of policy. Or your parents can also opt for senior citizen plans.

2. The coverage offered

Like with all health plans, it’s important to closely read the list of exclusions. Many reputed insurance policies leave out basic healthcare facilities. But more than that, you need a policy that covers pre-existing illness, if either of your parents has already contracted an illness. Also, check if the policy covers critical illnesses.

3. The sum insured

This is a primary concern when it comes to purchasing medical insurance for parents. The sum insured will be the reimbursement your parents will be getting if they are hospitalized. The higher the quantum, the better. 


If you want to buy health insurance for your parents, then you and your parents should analyze the factors we mentioned so that you can find the perfect fit.

Leave no stone unturned when it’s about Health insurance for your parents. Read

our next blog on health insurance for senior citizens. 


Financial Express