Beshak Initiative
COVID RESOURCES 2021 Daily updated Articles & questions
back arrow Back

Upgrading existing policy vs buying top up Health Insurance

reply Share
12 Oct, 2020 by  vijay

I've read Mahavir write earlier on increasing cover at renewal as much as possible till 38-40 instead of a top-up because companies make it very difficult to increase cover at older ages. And that top-up should be looked at only if the price of increasing cover is 20-30% more than buying a topup. The increased cover is apparently pain-free and uncomplicated during claim servicing etc.


However, with the recent ~30%+ announced premium increase even with existing cover, the cost of increasing sum insured is looking increasingly unaffordable. Moreover, this increased cover will again result in increased premiums for the rest of my life. Does the advice then make sense now and what would the pitfalls if say at 38 now, I keep the base cover as it is (10L) and increasing the top-up as needed till old age?


Some articles in ET also more or less advocate going for a top-up than increasing the base cover.



like like
0
Health Insurance
Opinion
Advanced

2 Answer

Post
12 Oct, 2020

Hey Vijay,

What is your current age and what plan are you on?

I'll give you advice specific to your scenario if you can share details.

like like
0
icon-comment 1 Comments
icon-reply Reply
13 Oct, 2020
vijay
Hi Anuj, I'm 37 and on a 10L individual plan from Royal Sundaram (Lifeline Supreme) taken in 2016. I will move to a floater after getting married for which they've promised to rollover continuity benefits already accrued.
like like
0
13 Oct, 2020

Thanks Vijay for the details.

At 10L SI, your Supreme policy would be 20 L by the time you renew your policy next year. As a claims expert, I can tell you it's a fairly sufficient cover for a family of 4.

I think you should re-visit this question of increasing cover in another 10 years. Your Supreme policy would be sufficient till then. Given your age, think of buying a super top-up policy from Royal Sundaram after about 10-12 yrs, for about 15-25L with 10L deductible.

Sellers have incentive to frighten you into buying more and more cover. Just don't fall into the trap.

Anuj Jindal

Co-founder

SureClaim

like like
0
icon-comment 1 Comments
icon-reply Reply
19 Oct, 2020
vijay
Thanks Anuj and sorry for the late response, I was busy doing further research based on your replay. I'm assuming your advice holds good only for people on plans like Sundaram's Supreme where the NCB is not rolled back even in case of a claim. ICICI's iHealth for example decreases the accrued NCB in the event of a claim by the same amount (10%) it is increased for a claim-free year. Being tied to Sundaram while good for higher coverage without paying an extra penny (thanks to the permanent NCBs), leaves me vulnerable however to higher premiums they charge at older age band crossings compared to competitors. They don't allow obtaining quotes for topups/super topups on the website, so I don't know how cost-effective it will be when the time comes to buy the topup 10 years down the line as you've suggested. I don't want to receive a shocker in terms of the combined base + top-up premium at that point as I'll be practically ineligible for a new policy anywhere else. I've dropped a mail to their (horrendous) customer service but if you have any additional insight here or otherwise, do let me know. As an aside, it is a bit puzzling as to how the company is able to offer a 10L base cover which has become 20L through permanent NCBs at half (or thereabouts) price of a 20L base cover and can only put it down to something akin to a loyalty reward than hardcore economics.
like like
0
Discover the best tips for insurance every week!
beshak logo

Beshak is your source for clear, research-backed information & analysis of insurance plans. Our sole focus is to help you make well-informed decisions on insurance. We don't sell or advertise insurance plans or companies.

facebook icontwitter iconlinkedin icon

Beshak is not regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and does not have any alliance or association with any Insurance business. © Copyright 2021 Beshak Solutions Pvt. Ltd. All Rights Reserved.

Disclaimer: The content on the website is purely for information purposes for the public at large, and does not constitute personal financial advice for a specific individual reader.
If you are reading this, it means you love reading the fine print. Why not get paid for what you love doing - Join us by writing to info@beshak.org now 🙂