I have a health insurance policy of Rs 3 lakh. Should I buy a super top-up plan or port my existing policy to get higher coverage?

I currently have a basic health insurance policy that covers up to Rs 3 lakh, but I’m concerned that this may not be enough in case of a significant medical emergency. I’m considering getting a super top-up plan or porting my existing policy for higher coverage. What factors should I consider when making this decision, and what are the benefits and drawbacks of each option? I would also like to know if I should invest in a critical illness plan to further protect myself and my family. Can you provide some guidance on what to look for in a critical illness policy and how it works in conjunction with regular health insurance? 

Name withheld on request

Reply by Rakesh Jain, CEO of Reliance General Insurance  

Let us assume you have a family of four (you, your spouse, and two children) and a family floater policy of Rs 3 lakh. Considering the rising medical inflation and increased health risks, it is prudent to increase your sum insured and opt for a plan with a broader range of offerings.  

It is crucial first to assess the healthcare requirements of you and your family. Consider factors like the location where you are staying, pre-existing illnesses and a pandemic-like situation wherein all family members can fall ill simultaneously, your surplus funds, etc. Whether opting for an enhanced health plan or super top-up, ensure you have a sum insured of more than Rs 10 lakh to cover any possible medical costs. Also, choose a policy that offers a wide range of flexible features and meets all your medical requirements.  

The super top-up policy offers additional health insurance coverage above your deductible limit. You can make claims from such a policy if your hospitalisation claim bill crosses your sum insured under the standard health policy.

Thus, you must evaluate the total premium. For instance, since you already have a base family floater policy of Rs 3 lakh, an additional super top-up plan of the sum insured of Rs 12 lakh with a deductible of Rs 3 lakh is relatively affordable than a new base policy with a sum insured of Rs 15 lakh. Super top-up plans offer coverage at a lower premium when your existing policy sum insured gets exhausted. The pricing of the super-top plan differs on the basis you opt for the deductible.

Today, you can add critical illness coverage to your basic health insurance (indemnity) plan. It will pay for a lump-sum payout as well as hospitalization for a critical illness that is life-threatening. There is also an option to purchase a fixed benefit critical illness add-on cover for the extra financial cushion. It offers coverage for a specified terminal illness and a lump-sum payout for medical costs. Whilst selecting a critical illness plan, you should check the list of illnesses covered, waiting periods, and payout amount. 

(Views expressed by the investment expert are his/her own.)