Medical insurance is a necessity in the life of every individual as it helps avoid the huge costs of medical services during emergencies. However, with the current rising costs of healthcare, basic health insurance may not fully cater for the needs of an individual. This is where the health insurance top up plan comes into play. Understanding and comparing these two types of insurance will make it easier to decide about your healthcare plan and coverage.
 

What is Health Insurance?

Health insurance is a general agreement between the policyholder and the insurance company that protects the policyholder against the financial risk of medical and surgical expenses.

It typically includes coverage for:

• Hospitalisation costs
• Pre and post-hospitalisation expenses
• Day-care procedures
• Ambulance charges
• Health check-ups
• Some policies also cover critical illnesses and maternity expenses

The common feature of most health insurance policies is the sum insured limit, which is the maximum amount that the insurer will pay for the covered medical expenses.

What is Top-Up Insurance?

Top up health insurance is an additional and complementary policy to the basic health insurance policy, in which the top up insurance covers the balance of the amount that is not covered by the basic policy. A top up health insurance policy is effective once the costs of medical bills go above a certain amount, known as the deductible.

Key features of top up insurance include:

• Higher Coverage at Lower Premiums: Top up plans provide extensive coverage at a much lower cost compared to regular health insurance policies.
• Deductible Limit: The policyholder is expected to firstly pay the bills towards the medical expenses until the deductible amount is met. As for the rest, only the amounts over this limit will be provided by the top up plan.
• Supplemental Coverage: It supplements the basic health insurance plan, offering additional coverage in case of costly medical treatments.

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Key Differences Between Health Insurance and Top-Up Insurance

Given below are some factors on the basis of which you can compare and choose the right insurance plan for yourself:

When to Choose Health Insurance?

Here are some situations when it's ideal to opt for health insurance:

• Basic Coverage Needs: If you want coverage that can cover routine check-ups, minor treatments, and hospitalisation at the first expense.
• First-time Buyers: If you do not have any other form of health insurance.
• Lower Medical Expenses: If you do not anticipate having large medical bills in the near future.

When to Choose Top-Up Insurance?

Here are some situations when it's ideal to opt for a top up health insurance:

• Supplement Existing Coverage: If you have a health insurance policy but need more coverage for expensive treatments or operations, get a top up health insurance policy.
• High Medical Expenses: If you think your medical expenses would be higher than the amount you get from your basic health insurance plan.
• Cost-effective Solution: If you wish to expand your coverage without causing a drastic rise in your premiums.

Combining Health Insurance and Top-Up Insurance

The basic health insurance policy can be complemented with a top up health insurance policy to make the coverage more beneficial but at a lower cost. Here’s how you can effectively combine both:

1. Evaluate Your Needs: Assess the current state of health insurance and estimate future medical expenses.
2. Choose a Suitable Deductible: Select a health insurance top up plan with a deductible that complements the current health insurance plan.
3. Cost-benefit Analysis: It is better to compare the amount you would have to pay to enhance your basic health insurance sum insured with the amount you would be paying for the top up plan. In most cases, the health insurance top up plan offers more extensive coverage at a lower cost than the main plan.
4. Policy Terms: When selecting your health insurance and top up insurance policies, ensure that the terms and conditions of both policies are similar to avoid complications when filing a claim.

It is crucial to distinguish between health insurance and top up health insurance to decide on healthcare coverage. While health insurance offers the required coverage from the first expense, top-up insurance provides further protection for a range of costly treatments over the basic policy. Combining both allows you to enjoy comprehensive coverage and financial security against medical emergencies without overburdening your budget.

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