It is similar to top-up health insurance plan, but provides for one or more claims cumulatively crossing the threshold limit.
Demand for super top-up plans in health insurance has increased significantly post the Covid-19 pandemic, owing to rise in medical costs and increased insurance awareness in the country, industry insiders have said.
According to data from Policybazaar, the share of super-top up in health insurance has increased from 10.5 per cent of health insurance premiums in the financial year 2018-2019 (FY19) to 34.6 per cent in the financial year 2023-2024 (FY24).
A super top-up health insurance plan pays the policyholder for medical expenses that exceed the coverage limit of their base health insurance policy.
It is similar to top-up health insurance plan, but provides for one or more claims cumulatively crossing the threshold limit.
"They (super top-up plans) did exist pre-Covid as well. But the uptake was obviously much less. Two things have happened since the first Covid wave hit. One, the medical costs have gone up. Every year, medical inflation is 14 per cent. So by default, medical treatment costs have gone up.
"Secondly, prior to Covid-19, nobody would have thought that the bills can be very large and most of the policies had around Rs 5 lakh as a coverage, which is grossly inadequate," said Siddharth Singhal, business head - Health Insurance, PolicyBazaar.
He added that "So post-Covid, people have realised that higher sum insured are much better. It is better to go for a higher sum insured and insurance companies have also understood the concept. Just by giving slightly incremental costs, you can have a very high sum insured, which protects you for any kind of eventuality."
The average sum insured of base policy in India also underwent a change post pandemic increasing to Rs 10 lakh from Rs 5 lakh amid the surge in medical inflation, according to industry experts.
According to a report by insurtech Plum, India’s medical inflation has reached 14 per cent, posing a financial strain on individuals who bear their own healthcare expenses.
"Before the pandemic, top-up health insurance was generally considered only a supplementary and not the prime protection. So, people used to buy such plans only if the advisors would advise. The adoption was relatively very low as compared to standalone health insurance.
"Many people would underestimate their own health risk and believed base policies were sufficient and so on and so forth," said Priya Deshmukh, head of Health Products, Operations & Services at ICICI Lombard.
"But Covid shifted the mindset of people, particularly with top-up plans with high treatment costs, insufficient employee coverage. There is this notion that if you have a top-up plan then the linkage of the two would be an issue and so on and so forth. But insurance trends of higher premium and more comprehensive plans, that is what has turned out as a change in the overall shifting," Deshmukh added.
The top-up insurance plan gives protection over and above the base plan which already provides comprehensive benefits across IPD, pre and post-surgical care, day care and other critical illness.
Industry leaders say that top-up plans come at an economic rate because it covers only the exceeding amount with the same coverage limit of the base plan, making it more economical than a higher base health insurance policy.
The growth rate in top-up health insurance plans rose by nearly 30 per cent immediately post pandemic due to increased awareness but now, it has normalised to and is expected to continue the growth around 10-15 per cent as compared to average growth of 10 per cent before the pandemic.
“But now the natural growth will come. Whatever is the organic growth in the segment will be seen in the segment,” said Bhaskar Nerurkar, head- Health Administration Team, Bajaj Allianz General.
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Feature Presentation: Rajesh Alva/Rediff.com
