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Advantages of buying a Super Top-Up with deductible lower the Base Policy cover

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24 Feb, 2021 by  Shubham Kumar

Are there any practical advantages of opting for a Super Top-Up cover that has a deductible which is lower than the Base Policy Cover?


Let me explain with an example.


Let's say that I want to buy a total cover of 20 lacs using a combination of a Base Policy and a Super Top-Up. Let's assume that I will always buy both the policies from the same insurer.


Case 1 - Base Cover of 10 lacs with a Super Top-Up of 10 lacs with 5 lacs deductible.

Case 2 - Base Cover of 5 lacs with a Super Top-Up of 15 lacs with 5 lacs deductible.



I understand that the Super Top-Up plan kicks in as soon as single/cumulative expenditure during the policy period crosses the deductible. Having said that, are there any practical advantages of opting for Case 1 instead of Case 2? Would the answer to this question depend on the age of the person being insured?

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Interesting question. The “working layer” of a super top up is the differential between cover limits and the underlying policy. To get maximum price efficiency out of the top up, one should match the deductible of the top up with the cover limit of the underlying policy. Case 2 will therefore be more price efficient than Case 1.

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26 Feb, 2021
Shubham Kumar
So, there are no advantages of going for Case 1? I am asking this because currently ICICI Lombard offers Super Top- Up plans with deductible options upto 5 lacs. Why would anyone buy a base policy of greater than 5 lacs then?
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