Your life is insured for a tidy sum, but do you have enough medical cover? Health insurance policies for ₹1-2 lakh, which most people opt for, are way too low for you to be able to tide over your sunset years, when medical expenses are likely to soar.

In the last five years, the cost of hospitalisation for common ailments has increased by at least 10 per cent annually. Reports suggest that for diseases such as circulatory ailments, the cost of treatment has been galloping at 12-13 per cent.

This is on top of already elevated cost for procedures related to heart ailments — such as placing of stents, pacemakers and so on. Even if the ‘no claim’ bonus adds about 5 per cent to your cover for a limited period, it would still not be sufficient to cover hospitalisation costs for serious ailments.

The numbers suggest that if you’re looking for a health cover, an individual or a family floater policy for at least ₹10-15 lakh may be necessary. So, how can you augment your health cover? Taking top-ups or super top-ups, buying a second policy, adding on defined benefit plans and availing of a separate critical illness cover are some of the key options. Porting to a higher sum assured is another way to bolster your health cover.

Here we explain each of these options with their merits and shortcomings to help you make an informed choice on what would suit you best.

Top-up, ‘super’ top-up Topping up your existing medical policy is the most cost-effective method to enhance your overall health cover. The entry age is as high as 65 years with many insurers offering this type of cover. Companies such as Apollo Munich, ICICI Lombard, United India Insurance, HDFC Ergo and Bajaj Allianz offer top-up policies. A basic health cover of ₹2 lakh would cost you anywhere between ₹2,700 and ₹5,700 a year in premium, if you are a 35-year-old male.

But a top-up policy with a sum assured of ₹10 lakh and deductible of ₹2-5 lakh would cost you only ₹2,300-3,700, going by the quotes of Bajaj Allianz, ICICI Lombard and Star Health. So, for five times the earlier sum assured, you would pay a lower premium! However, do note that top- up policies are usually not cashless and would require you to foot the bill first.

There are strings attached, though. Let’s say you have basic health cover for ₹3 lakh and you take a top-up cover for ₹10 lakh. Now, all top-ups are taken with a ‘threshold’ level or ‘deductible’, only after crossing which the policy actually gets triggered.

In the above example, the threshold level of the basic policy is ₹3 lakh. The top-up cover would come into effect only after the ₹3 lakh in the threshold level is exhausted. Suppose you make a claim of ₹5 lakh, the base policy would pay you up to ₹3 lakh and the top-up policy would pay ₹2 lakh.

But if you have a claim of, say, ₹12 lakh, your base policy will cover you for ₹3 lakh after which your top-up policy will kick in. It will provide you with another ₹7 lakh, as the total sum insured is ₹10 lakh. You will have to dip into your pocket for the extra ₹2 lakh.

This shortcoming of a top-up is overcome by a super top-up policy, though few insurers offer this cover.

Now assume you have a basic cover for ₹3 lakh and take a super top-up for ₹12 lakh with ₹3 lakh as deductible.

If you have a claim for ₹4 lakh and later in the year again run up a medical bill of ₹4 lakh, the super top-up would fill in with ₹1 lakh (₹3 lakh from basic cover) for the first time and the entire ₹4 lakh during the second time. Thus, your full claim would be settled without you having to spend anything from your pocket. Right now, L&T Insurance, United India Insurance and Max Bupa offer super top-ups.

The premium for a ₹12 lakh sum assured policy with ₹3 lakh as deductible is just ₹2,100 for an individual cover for a 35-year old and ₹3,708 to cover a spouse and a child. As with a regular policy, there would be a minimum waiting period, exclusion of treatment in case of some ailments and individual limits for specific diseases in the case of top-ups. Some insurers, such as Bajaj Allianz, offer immediate cover in case you already have another health policy where you have paid premiums for four years. HDFC Ergo too offers credit if there is an existing policy where you have paid premiums without break and have spent some waiting period. Apollo Munich offers a top-up that makes its cover deductible free from 58-60 years of age.

In case your basic policy and the top-up policy are from two different companies, informing two insurers and getting the claim settled may be cumbersome. But if you can choose a network hospital common to both insurers, the process might be simpler as the insurance company’s desk at the hospital would help you sail through without too many hassles. There are no claim bonuses available on top-up plans as well.

Defined benefit plans While the standard health policy usually covers you for hospitalisation, how do you cover your other medical expenses? Critical illness plans can come in handy here. They pay you a lumpsum which you may use either to meet your medical expenses or maintain your family in the event of illness.

If you have a family history of major illnesses such as diabetes, cancer, heart ailments, liver diseases, or strokes, among others, it would make sense to take a critical illness policy. Even otherwise, given the unhealthy lifestyle that many of us lead, it is safe to take such a cover.

The critical illness cover gives you a lumpsum, if you survive for a minimum of 30 days after first being diagnosed with a major ailment. Even if your actual expenses are lower than the sum assured, you will get the entire amount. So, if the expense on treatment of a critical illness was ₹5 lakh, and if you have a policy for ₹10 lakh, you will be given ₹10 lakh on your claim. For a cover of ₹10 lakh, the annual premium would work out to ₹3,100-3,300 for a 35-year-old, for insurers such as HDFC Ergo, Bajaj Allianz and Max Bupa.

Bharti Axa General Insurance offers a critical illness cover for over 20 illnesses at an annual premium of about ₹5,400. Other plans pay fixed cash benefits in case of hospitalisation. This can also cover any loss of income suffered during your stay in the hospital.

These schemes will pay you cash even if you have any other regular policy operating. So, a sum of ₹2,000-4,000 is paid daily, which is stepped up a bit in case of treatment in the hospital ICU.

Some defined benefit plans come with surgical benefits as well and so for defined surgeries a sum of ₹1-5 lakh would be paid. Insurers such as AEGON Religare and Tata AIG offer these policies and the premium is about ₹2,000-2,800 for a cumulative cover of ₹10 lakh with defined daily benefits.

Even day-care procedures that don’t require 24-hour hospitalisation are covered but the daily allowance is mostly halved in these cases.

Porting to another insurer This is a slightly tedious and a less popular route to enhancing your cover, but worth a look nonetheless. If you have an existing health insurance policy that offers too low a cover, or your claim experience has been bad, you can move your policy to a different player.

You need to give notice to the new insurer at least 45 days before the next premium becomes due. Of course, the new insurer is within its rights to accept or reject the applicant and also to increase the premiums or co-payment clauses based on your claim history.

You will also receive credit in terms of waiting period with the new insurer, if you have paid premiums without break with the exiting insurer. If the sum assured you opt for is higher than your existing cover, the fresh waiting clauses will apply for the enhanced portion alone.

But there are statistics to indicate that only about 2 per cent of people opt for porting of medical insurance policies. This may be due to the procedures involved as well as the uncertainties about whether the new insurer would be willing to take you on board.

Taking a second policy This is a relatively easier option for you. If porting does not work for you, retain your existing policy and take a second cover from a totally different insurer. The only problem would be that you will have to go through with the claims procedure with two different insurance companies instead of one. This may be less cumbersome if you look at insurers with common network hospitals. All the clauses on waiting period, pre-existing illnesses and exclusions would apply to the new policy.

Large-sized cover Life policies of ₹1 crore have become quite commonplace but not so with medical insurance. Only a few insurers such as Max Bupa and Cigna TTK offer really high-value medical insurance policies with sum assured of ₹50 lakh to ₹1 crore.

The covers are extremely comprehensive and cover all illnesses and also maternity benefits.

For a ₹50 lakh cover Max Bupa charges around ₹52,000 a year, while Cigna TTK charges ₹37,000 for a ₹1-crore cover for a 30-year-old male.

Though the sum assured is extremely high, the premiums do not appear that expensive. You can choose this option if you have high surplus and are in the early stages of your career. This way, you may not need any other top-ups or additional cover at all, even later in life.

Also read: >Paying through the nose for your health

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