Insurance Query. Can lower-premium super top-up from digital/new entrant be paired safely with existing insurer?

Sarbvir Singh, CEO- Policybazaar.com. 

I am having a floater health insurance policy with a sum assured of ₹30 lakh and accumulated cumulative bonus of ₹7.5 lakh for me and my wife, aged 61 & 58 years. The annual premium is about ₹55,000. Presently, we do not have any health issues. However, considering medical inflation and the uncertain environment, we were planning to take a super top-up plan for ₹50 lakh with ₹10 lakh deductible limit. To avoid any hassles and for proper claim settlement in case of hospitalisation, we preferred to have both the base plan and super top plan from the same insurer. However, we were shocked to see the big disparity in the premium quoted by the existing insurer, which is 5-7 times the super top premium charged by digital only insurer or a new entrant.

Kindly advise, whether lower premium super top up from digital/new entrant can be paired safely with existing insurer and is there any risk of claim rejection by existing or super top-up insurers, if they are different.

Roy, Kochi

First of all, thank you for your query. It indicates how there is an increased awareness about the importance of health insurance. Moreover, your query also shows that this awareness is not only limited to just getting insured, but also ensuring that the cover is adequate. This is quite heartening to see.

Now coming to the policy, there is absolutely no issue in having a base plan from one insurer and choosing a super top-up from another insurer. In general, purchasing a top-up health insurance plan from a different insurer should not affect your ability to file a claim with your existing health insurance policy. Your existing policy will still provide coverage for the services and expenses it covers, and the top-up plan will provide additional coverage for any expenses that exceed the coverage limit of your existing policy.

It would be wise to consider purchasing a top-up plan from a different insurer if they offer better coverage options or a more competitive price. So if you find a significant disparity in premiums offered by your current insurer and other insurance providers, you could make your decision without worrying about any risk of claim rejection simply based on the fact that your base cover and top-up cover are from different insurance companies. The decision, in fact, should be based on other important factors such as the claim settlement ratio, ease of claim processing, network hospitals and, of course, the amount of premium being charged. It is suggested that neither should you look at premium in isolation, not should you base this decision on which insurer you have bought the current plan from.

If you choose to go with a different insurer for the top-up plan, or the super top-up plan, you would need to inform both the insurance companies at the time of making a claim, if your claim amount is more than ₹37.5 lakh. Else, it could lead to rejection of your claim.

Moreover, if you wish to further lower your premium on the super top-up cover, it is suggested that you increase your deductible from ₹10 lakh to ₹30 lakh. A top-up health insurance plan provides additional coverage above and beyond your existing health insurance policy. Since your current plan already covers you for ₹37.5 lakh, you wouldn’t need the top-up anyway for claims up to this limit. You would be able to negotiate a significantly lower premium by increasing your deductible, without compromising on your financial well-being.

Most important, it’s always a good idea to carefully read the terms and conditions of the current as well as the top-up policy being considered before purchasing it, to ensure that it meets your needs and provides the coverage that you’re looking for.

The writer is CEO, Policybazaar.com

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