So here’s how you can save money on health insurance.
Given that medical costs are very high today, lots of you may be thinking of taking a large health insurance coverage. The typical option is to take a 10 lakh cover and cover your entire family under the family floater option. The smarter way to do it is to take a 5 lakh cover as the base plan and then take a super top-up plan for another 5 lakhs.
So let me give you an example of an individual who’s 30 yrs old and opted for a 10 lakh cover. The premium for a 10 lakh cover for the 30-year-old might actually come to around Rs. 9,100 per annum. This is for a particular plan from HDFC Ergo.
Now, Instead of going for a 10 lakh cover, you could go in for a base cover of 5 lakhs – the premium for this plan is Rs. 5,700. Then go in for a Super top-up health insurance plan which covers the balance of 5 lakhs – the annual premium for this will be Rs. 1,275. So in effect, you make a saving of Rs. 2,125/- every year. As your age increases the premium savings would be much much more.
So now let me try to explain how the super top-up health insurance plan works. Instead of going in for one 10 lakh plan, take a base plan for 5 lakhs. Then go in for a super top-up plan of 10 lakhs with a deductible of 5 lakhs. This means that super top-up comes into effect only after your 5 lakhs is actually consumed. This deductible in the super top-up means that till the medical expenses are 5 lakhs the super top-up doesn’t come into effect and you should use the base plan cover for the same.
Let me explain how the Super TopUp plan will work when you make a claim. Assume you have a base plan of 5 lakhs and a super top-up of 10 lakhs with a 5 lakh deductible.
Scenario 1: Suppose you make a claim for 3.5 lakhs. Then your base cover itself is sufficient to cover that and the Super Top-up plan does not come into play at all.
Scenario 2: Now suppose you make a claim of 3.5 lakhs and then you make a claim of another 2 lakhs. So now your base plan had 5 lakhs out of which the first claim consumed Rs. 3.5 lakhs. You made another 2 lakhs so the total claim amount now is Rs. 5.5 lakhs. So that’s where the super top-up comes into effect. After your 5 lakh is consumed, the balance of 0.5 lakhs will get covered by the super top-up plan. Now, this is how you can save money on the super top-up.
You get to keep a large cover and pay lower premiums for the same.
Since the Super Top Up plan will not come into effect in most cases, the insurers have priced them accordingly.
Do drop in a comment in case you want any further clarifications on the same.
