Top-Up Solution To Piling Claims

Base policies are proving to be inadequate because of rising medical costs and premiums. To ensure a large coverage at affordable rates, they need to be combined with a super top-up insurance that takes care of rising family claims

- Sanjeev Sinha

A decade ago, a ₹5 lakh health insurance policy felt reassuring.

Today, it feels inconsequential with hospital bills routinely running into several lakhs. Medical costs in India are rising at close to 14 per cent annually, nearly three times the pace of general inflation, according to the ACKO India Health Insurance Index 2024. Hospital rooms that once cost ₹3,000 a day now routinely cross ₹6,000. Procedures considered “major” expenses, such as angioplasty, knee replacement, gall blader and cataract surgeries or even a C-section delivery, to name just a few, have become standard line items on hospital estimates.

At the same time, health insurance premiums have begun to climb just as sharply because the premiums reflect risk, which has changed dramatically. Longer life expectancy, higher incidence of lifestyle diseases, expensive medical technology, and post-pandemic healthcare utilisation have all pushed claims upward. Insurers are responding with higher premiums, especially for comprehensive base policies.

As policyholders age into their late 40s and 50s, renewal premiums often jump 20-25 per cent in a single year.

For many middle-class families, this has created a quiet dilemma: stretch the budget to keep increasing the base cover, or accept that their insurance may fall short when it matters the most.

This widening gap between soaring medical costs and rising premiums has turned top-up and super top-up health plans from optional add-ons into essential financial tools as they offer a higher cover at lower premiums, thanks to their structure. But these plans are often misunderstood.

Let’s understand how these plans can solve your health insurance coverage dilemma.

Base Health Cover May Feel ‘Enough’ Until It Isn’t