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Why Should you Expand your Mediclaim with a Top-up Plan?

What is a Mediclaim Insurance Policy?

In a Mediclaim insurance policy, the insurer is financially protected against certain health-related emergencies. In general, it’s known for its pocket-friendly approach to mitigate health-related risks for its policyholders. Being pocket-friendly the basic coverage generally includes the costs of hospitalization and other expenses over this has to be borne by the insurers themselves.

Is a Mediclaim policy different than a health insurance policy?

This might be a very common confusion between first-time policy buyers in India and can be understood simply by understanding what a health insurance policy covers over and above Mediclaim policies. In a health insurance policy, the coverage includes the medical and surgical expenses during the hospitalization of the insured, in some scenarios the insurer is the one who pays these upfront costs at the time of hospitalization and the expenses get reimbursed later on by the insurance provider under the conditions of the policy. This depends on whether it is a cash-less or reimbursement policy. Another method would be in which, if the insured is hospitalized in any of the network hospitals on the insurance company, the insurance companies settled all the necessary bills on behalf of the insurer, famously known as the cashless facility. These benefits are all in accordance to the terms and conditions applied in the policy. The health insurance cover is usually far more extensive yet much expensive than a Mediclaim policy.

What are some features of a Mediclaim policy?

  • Coverage- A Mediclaim policy covers the basic costs of hospitalization, treatment expenses, due to accidents and certain diseases.
  • Sum assured- These policies come with a pre-decided coverage sum assured.
  • Factors affecting premiums- Generally factors affecting policy premiums include the sum insured, the insured’s age, the duration of the opted plan and often times the geographical location.
  • Plan basis coverage- Mediclaim policies can be purchased on a personal basis, or as a family floater basis, ensuring the insured’s family including their spouse, dependent children and dependent parents.
  • Tax exemption on policy- Tax exemptions can be derived under this policy under section 80D of the Income Tax Act ,1961.

Why should one consider expanding their Mediclaim with a top-up policy?

In today’s age and time of the emergencies and health complications are much amplified and uncertain. In addition to the existing influence of health complications we face the health crisis in the name of COVID-19.  One has it clear that a health insurance provided by employers is not sufficient to beat the medical inflation along with these other risks. In such scenarios one might want to buy an individual health insurance, but as we discussed it before, one could find it too expensive as an addition to other expenses, or you already have a Mediclaim insurance policy and want to expand the coverage, but the excessive costs are deterring you from doing the same. Should you continue with the lower employer basic insurance coverage but consider a better alternative available.

Let us evaluate this situation faced by our friend Amit, when one day he was faced with this reality of the current situation, there arose some concerns in mind to help him evaluate a better alternative to expand his Mediclaim policies. Amit along with his wife and two children was covered in a policy for amount of Rs. 5 Lakh but he was not sure if this is an adequate plan to suffice his family of four.

This situation arose when he saw news of people being admitted to hospitals due to COVID symptoms and being treated for days and weeks together and while getting discharged faced humungous hospital bills. He realized people were forced to dig into their savings and their family’s corpus even borrowing money to get their loved ones get discharged by paying the heavy hospitalization costs. Amit already had Mediclaim policies for his family and was paying Rs.35,000 premium on it annually. Working his way for a solution he realized it would be the best in this situation to buy a top-up plan on his existing Mediclaim policy.

What is a top-up Mediclaim plan and how does it work?

A top-up is just like a stepney or a spare tire you carry along in a car when you along with a family set out to an untraveled adventure ~ called life. Apart from this philosophy it’s an extension to your pre-existing Mediclaim policy which comes into the action only when the single claim crosses the threshold limit. The top-up plan on a Mediclaim policy comes with a deductible, that means that according to this policy the claim will be settled once they cross the threshold limit only. 

Consider this, you have a Mediclaim plan of Rs.4 lakhs and a top-up policy of Rs.12 lakhs with a deductible limit of Rs.4 lakhs. If you run up a medical bill of Rs.8 lakhs; you can use the existing Mediclaim insurance policy to pay Rs.4 lakhs and then your top-up policy to pay the remaining Rs.4 lakhs.

While considering to opt for top up plan, keep these in mind-

  • You don’t necessarily buy a Mediclaim policy or a health insurance policy to purchase top-up plans.
  • According to terms of the policy, threshold limit set is applicable for each plan tenure.

Benefits of top-up policy

  • Since Mediclaim policies come with a set limit, insured ones can secure themselves from minor hospitalization expenses which could be frequent and unpredictable. Also, the benefits are carried forwarded on to policyholders in the form of cheaper premium rates.
  • Since medical costs are touching the roofs, for the average person, it is useful to buy top-up plans which can help in case of medical expenses in emergencies.
  • It provides an option to enhance the policy coverage while renewing the current policy, without having to bear the expenses of buying a new policy or upgrading the existing one with policy altogether.
  • A top up plan is available with both individual and family floater health insurance policies. However, it is advisable to buy Mediclaim policy for individuals of the family and opt for a top-up as a family floater.
  • One can buy the policy, even if you don’t have any health insurance policy. Also, if the existing health policy gets exhausted the insured can be rest assured and in peace of mind by having a top up available.
  • One can purchase the policy from any insurance company as there it’s not mandatory for the insured to get the policy from the same insurer they purchased their Mediclaim policy from.
  • One of the most beneficial flexibility these plans provide is when insurers allow the transfer of top-up policy into an individual Mediclaim insurance plan
  • Also top up policies enjoy tax benefits under Section 80D of the Income Tax Act, 1961.

Another suggestion would be to pay a double premium amount, so that the insured can expand their health insurance cover by almost over four times. It is very important for policy seekers to go through the top-up coverages prior to buying the policy because they don’t want to end up purchasing a plan which won’t even cover medical expenses which might arise as an emergency.


As discussed above rising inflationary pressure could send medical costs through the roof. Be it hospitalization or medicines or be it various diagnostic tests, the costs seem to be ever increasing with every passing year and the current pandemic. Given the healthcare costs, top-up plans have necessary along with insurance policies and ignoring them can have adverse repercussions.

Some might be already covered under some Mediclaim policy or might have corporate health insurance through their employers and feel it is not sufficient, for such people top-up policy is a great alternative. However, one must keep in mind the set threshold limits as these policies do not get triggered unless and until the threshold levels are met.


Can one cover their family members in this plan?

Yes very well, one can cover their family members given below in one single policy based on Individual Sum Insured basis. Relatives considered could be - Brother, sister, grand son, granddaughter, daughter in law, son in law, nephew, niece, grandmother and grandfather are among the ones who can be covered.

Does one have to go under medical tests before buying this policy?

Generally, a policy seeker is not required to undergo any medical tests, exception if they are of age 55 years, or above, except if they have declared any pre-existing diseases or illnesses while applying for the policy. Only in these cases and for applicants above age 55 years, one has to undergo the specified medical tests.

What is the entry and exit stages for this plan?

Similar to many policies, one can enter the policy from the age of 18 years and up to 65 years. Adding to its flexibility one can insure their children from the age of 91 days to the age of 23 years.

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