How a Extended Health Insurance Policy Can Help You Pay Lower Premiums for Higher Coverage – Explained


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A supplemental health insurance policy is like a supplemental health insurance plan that helps you improve the level of coverage while keeping the premium affordable. According to Dhirendra Mahyavanshi, co-founder of Turtlemint (An InsurTech Company), there are two components of the recharge policy that you need to understand.

“Supplementary health plans come with an insured sum and a deductible limit. When the claims exceed the deductible limit, the excess claim is paid by the insurance company, ”Mahyavanshi told FE Online.

Example: How does supplementary health coverage work

For example, let’s say you buy an add-on plan with a sum insured of Rs 5 lakhs and a deductible of Rs 2 lakhs. Now, if the claim exceeds Rs 2 lakhs, the excess claim would be covered by the top up policy.

According to the co-founder of Turtlemint, the supplement policy works best in combination with an existing health insurance plan. You can take out an additional policy whose deductible coincides with the sum insured for the basic policy. In such a case, claims up to the deductible would be covered by the basic health insurance plan while excess claims would be covered by the supplemental plan.

Types of charging policy

Complementary health insurance comes in two variants: complementary and super complementary.

As part of the complementary plan, each claim is counted with the deductible limit. If the loss exceeds the deductible, the deductible is paid.

In the case of super supplemental plans, the cumulative claims incurred during a year are deducted from the deductible. If the total claims exceed the deductible, the deductible is paid.

How to buy the best charging plan

Mahyavanshi shared some tips for buying the best recharge policy:

  • Match the deductible with the sum insured for the existing health plan
  • Opt for optimal coverage
  • Check the benefits of the coverage to make sure the coverage is inclusive
  • Check the pre-existing waiting period and go for a plan that has a short period for quick coverage
  • Check coverage limits and sub-limits and opt for plans that don’t significantly restrict coverage
  • Check out the list of networked hospitals and go for a plan that has the largest network of hospitals

How much can you save by purchasing a top-up policy?

The Turtlemint co-founder said that a supplemental policy is recommended when you want to increase your health insurance coverage but don’t want to pay a high premium. The policy is very profitable and saves you on the cost of the premium.

For example: Let’s say a 35 year old man has an existing plan of Rs 5 lakhs with a premium of between Rs 6000 and Rs 8000. If he wants to increase the coverage to Rs 10 lakhs he has two options:

Case 1 – He can increase his coverage on renewal with the same insurer or another. Approximately, the premium for Rs 10 lakhs of compensation coverage would cost between Rs 10,000 and Rs 12,000.

So its additional cost = Rs 4000 approximately for the additional coverage of Rs 5 lakhs.

Case 2 – He can opt for a super top-up plan of Rs 5 lakhs and a deductible of Rs 5 lakhs because his existing plan is Rs 5 lakhs. The premium for the super recharge policy would be between Rs 1000 and 2000 per year.

His premium expenditure would be in the order of Rs 6000-8000 (for his existing plan) + Rs 1000-2000 (for the super complementary plan).

So its incremental cost = Rs 1000-2000 approximately. for the additional 5 lakhs coverage.

Thus, the recharge plan can help you save your overall premium expenses. It is recommended by insurance advisers to improve coverage if you have a basic health insurance policy.

Do you know what it is? FE Knowledge Desk explains each of these and in more detail on Financial Express Explained. Also get live BSE / NSE stock quotes, latest mutual fund net asset value, top equity funds, top winners, top losers on Financial Express. Don’t forget to try our free income tax calculator.

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