Nowadays, health insurance companies have become better at understanding the needs of their clients. They know that they need to offer flexible group health insurance plans in order to meet client needs. The client in turn knows that every employee has unique needs and will not buy a policy unless the needs of all of these employees are met.
But with a diverse workforce, the needs of a group policy can be extremely diverse. There is however one product that remains suitable for most of the workforce. The group health insurance voluntary top-up. This policy offers one way in which insurance companies cater to the needs of a diverse workforce.
What’s on this page?
Voluntary top-up in group health insurance
What is Voluntary Top-Up?
Every policy comes with a sum insured along with sub-limits for various diseases. The “sum insured” is the maximum amount that can be claimed from an insurance company under a policy. Also, almost every policy has “sub-limits” for different diseases. This means that the most that can be claimed for the treatment of these diseases are limited by the “sub-limit.”
Hence, there is a need for a voluntary top-up in group health plans because the total sum insured in the group policy may not be adequate enough to provide complete coverage in the case of expensive medical treatments.
Voluntary top-up essentially means that the sum insured under a policy can be increased if the need arises. To get a voluntary top-up, the policyholder will have to pay a higher premium.
Consider a situation in which the sum insured under a policy is Rs. 5 lakhs. However, a medical emergency occurs, and the total cost of treatment turns out to be Rs. 7.5 lakhs. In such a case, it would have been helpful to have availed of a voluntary top-up of Rs. 5 lakhs.
With the voluntary top-up, the user would not have had to pay Rs. 2.5 lakhs for their medical treatment from their own pocket.
How Does Voluntary Top-up Work?
A voluntary top-up needs to be availed at the time of availing the policy or at the time of renewing the policy. A higher premium needs to be paid in case a voluntary top-up is opted for under an insurance plan.
The voluntary top-up kicks in after a claim amount reaches a certain deductible amount. It does not have any effect if the claim amount is lower than this deductible amount. For example, the deductible amount can be Rs. 2 lakhs on a policy with a sum insured of Rs. 5 lakhs and a top-up amount of Rs. 3 lakhs.
In such a scenario, the sum insured becomes Rs. 8 lakhs in case the claim amount exceeds Rs. 2 lakhs.
The voluntary top-up is useful because it provides an additional coverage amount in case the claim amount crosses a certain threshold. However, for claims of a lower amount, the top-up will not have any effect.
When to opt for Voluntary Top-Up?
Healthcare costs are rising every year in India. Part of it is due to inflation, while part of it is due to increasing demand for healthcare services. In such circumstances, it can become necessary to have a health insurance plan which can cover medical costs in case the need arises.
A low sum insured can mean that the policyholder will need to cover any additional costs from their own pocket. This is less than ideal when you’re already paying for health insurance. If you feel like your group health insurance does not provide a sum insured that is high enough to cover potential medical conditions, then opting for a voluntary top-up is your best option.
Since group health insurance plans are designed to cover the basic needs of every member, the covered sum insured may not be sufficient for someone who is older or who has greater medical needs. The GMC top-up is a highly useful add-on that brings more flexibility to group health insurance plans.
Conclusion
Employee health insurance top-ups are a great way for employees to take charge of their health insurance. It ensures that every employee has the required coverage to meet their healthcare needs. The voluntary top-up option adds much needed flexibility to group plans, which may not have an adequate sum insured for everyone’s needs.
Frequently Asked Questions (FAQs)
- If I don’t use the voluntary top-up during the policy year, do I get a refund of the extra premium I paid?
No, the premium paid for the voluntary top-up is typically non-refundable, similar to the base premium for the group health insurance plan.
- Can I use the voluntary top-up for any medical expense, or are there restrictions?
The voluntary top-up generally follows the same terms and conditions as the base group health insurance plan. This means that it covers the same medical expenses as the base plan, subject to any exclusions or limitations specified in the policy. It essentially increases the overall sum insured available to the employee, providing a higher limit for eligible medical expenses.
- Is a voluntary top-up a better option than purchasing a separate individual health insurance policy?
In most cases, a voluntary top-up within a group health insurance plan is more advantageous than a separate individual policy. This is because group health insurance plans typically offer lower premiums due to risk pooling and often have more comprehensive coverage than individual plans. Additionally, the top-up seamlessly integrates with the existing group plan, simplifying administration and claims processes
- Can I increase or decrease my voluntary top-up amount during the policy year?
Typically, changes to the voluntary top-up amount are only allowed at the time of policy renewal. This is because the premium is calculated based on the chosen top-up amount for the entire policy year.
- If I leave my current employer, can I transfer my voluntary top-up to a new group health insurance plan?
No, the voluntary top-up is linked to the specific group health insurance plan offered by your employer. If you leave your job, the top-up coverage will cease along with the base group health insurance.
