the deductible amount, which is covered by a normal health cover policy or through any other relevant source. Had Kumar gone for a top-up cover, the policy would have kicked in after the R3 lakh limit was exhausted.
An obvious advantage of a top-up is that it is cheaper than a normal health insurance policy, but only till the deductible amount is higher. It is the most affordable means of extending the health cover, through a perfect combination of a basic policy and an ideal medical top-up.
The second advantage is the ease of purchase. There are no absolute restrictions regarding the choice of companies for getting a top-up health cover. One is free to buy a top-up plan from a company other than the basic health insurance provider, without any fear of termination of the insurance contract, or any other consequences. Third, a top-up plan is available in two distinct versions — individual cover and family floater— and is eligible for deduction under Section 80D of Income-Tax Act.
The writer is CEO. BankBazaar.com