DECODING INSURANCE

Feeling Inadequately Insured? 3 Ways To Extend Your Health Insurance

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Bhanvi Arora
12 Jun, 2020 6 min

E
ven the best healthcare systems around the world have been overwhelmed by the Covid-19
pandemic. In India, news reports pouring in about inadequate hospital capacity, public and
private combined, are beginning to reach alarming proportions. The prevailing exorbitant cost
of treatment at private hospitals is sure to decimate the personal finances of even those with
reasonably good planning. This is the time to re-evaluate if your health cover offers adequate
protection against utterly unforeseen emergencies such as the Covid-19 pandemic. The desire to opt
for a lower health insurance cover to save on a few thousand rupees in premium might truly make you
appear penny wise and pound foolish in these times.

Moreover, in India, the cost of healthcare is rising fast, pandemic or not.

If you have a health cover and feel that the sum insured is not enough to cover possible medical
emergencies, you have three options to remedy the situation:

1. INCREASE YOUR SUM INSURED AT THE TIME OF RENEWAL

Every insurer gives you the choice to increase your sum insured at the time of renewal. The good part
about this is that there is no waiting period unlike opting for a new health insurance plan which will
have a waiting period of up to four years for pre-existing diseases. An individual with a spouse and a
kid should go for a health insurance cover of at least Rs 20 lakh. A cover of that size for a young
family of three with a 5-year-old child will cost about Rs 25,900 a year.

2. BUY A SUPER TOP-UP PLAN

A top-up plan provides additional cushion to your existing health cover when your hospitalization bill
crosses your sum assured limit. For buying a top-up plan, you need to choose a deductible. Deductible
is the amount that the insured pays from their own pocket, or their basic health policy pays for it
before the top-up cover activates. Top-up policies only pay for the amount above the deductible limit.

Suppose your top-up cover has a deductible of Rs 5 lakh and in a year you submit as claim two
separate hospital bills of Rs 4 lakh and Rs 1 lakh, then your top-up plan won’t be activated. In such a
case, super top-up comes into play. A super-top up has provisions for multiple claims.

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It is best to buy a super top-up plan from your existing insurer as it is easier for hospitals to coordinate
with one insurer for a customer at any given time. There are many health insurance plans available in
the market which have a base plan and a top-up health cover. Super top-up plans also provide
coverage for both pre and post-hospitalization expenses, along with pre-existing diseases (with a
waiting period) and daycare procedures.

The premium paid for super top-up plans is also eligible for income tax deduction under section 80D.
Top-up or super top-up plans are also cheaper as compared to a comprehensive individual health
insurance policy. The higher the deductible, the lower will be the premium of your top-up or super top-
up plan and vice-versa.

3. PORTABILITY
Portability is when you switch your health insurance policy from one insurance provider to another.
While applying for portability, you can seek an increase in sum assured. However, this request for an
increase in sum assured is subject to acceptance by the insurer. The extent of the increase in sum
assured is decided by the underwriter depending upon the age and health of the customer. Your claim
record has the biggest impact on the insurer’s decision to give you an expanded cover. If the request
is made for a claim-free policy, the chances of approval are high. An individual should also carefully
check the benefits being offered by the new health insurance plan while porting a policy.

When you want to port your health insurance policy, you need to approach the new health insurer at
least 45 days before the expiry of your existing policy. You need to fill a proposal form for portability
and provide copies of the existing policy. On receipt of the request, the new insurer will approach the
existing insurer to know your medical and claims history. Once the new health insurer obtains all the
details, it has to take a decision on whether to accept porting within 15 days. If the insurer fails to do
so, it will have to perforce accept the application.

(Article edited by: Sunny Lamba)

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HEALTH INSURANCE PORTABILITY TOP-UP COVID-19

Written By
Bhanvi Arora
Bhanvi writes @ PBLife. She loves to sing, travel, play badminton, eat white chocolates and sweet corn.

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