Top-Up Plan vs. Higher Sum Insured – What is the Best Choice for Your Family's Health Insurance?

Healthcare costs in India are witnessing a double-digit rise (higher than the global average).

Add to this the fact that there is now an upward trend in lifestyle diseases and that environmental risk factors are on the rise (India Global Health Security Risk ranking on this factor was 59.6 in 2019 and has now dropped by 5.7 points to 76 in 2025). The need for adequate insurance coverage becomes clear.

This raises a crucial question that every family must consider: Should you pay a higher premium to increase your base sum insured or opt for a top-up plan that enhances coverage at a lower cost?

This blog will explain how top-up versus higher-sum insured plans in health insurance work, along with how their premiums compare, the claims process, and the limitations of each approach.

What Is a Higher Sum Insured Plan?

A higher sum insured plan is simply a standard health insurance plan, with the only difference being that your sum insured, i.e., the maximum amount that will cover your medical expenses, is higher from the get-go.

For instance, if a standard base policy provides a sum insured of Rs. 5 lakhs, you can choose to increase it to Rs. 10 or even Rs. 15 lakhs, which, of course, will drive up the premium as well.

These plans often cover all forms of expenses (subject to the plan's policy terms), such as hospitalization costs, room rent, ICU charges, surgeries, and sometimes even single-day procedures from the moment the plan becomes active.

The downside – premiums for higher sum insured plans are sky high. This makes them less financially viable for families with a moderate claim history or those who foresee potential hospitalization in the near future.

What Is a Top-Up Health Insurance Plan?

Top-up health insurance plans are an affordable alternative to high sum-insured base plans. These plans offer additional coverage beyond your base plans for a fraction of the premium. 

The primary difference between a top-up plan and a higher sum insured plan is that the former activates once a specified threshold (of medical costs), known as a deductible, is reached.

For instance, let's assume Vivek Kumar has a base plan with a coverage of ₹10 lakh and a top-up plan that offers an additional ₹ 15 lakh coverage with a deductible limit of ₹10 lakh. The top-up plan will only activate if the medical costs exceed ₹10 lakhs. Assuming the hospital bill amounts to ₹20 lakhs, the base policy will cover ₹10 lakhs, and the top-up plan will cover the remaining ₹10 lakhs. 

Super top-up plans are another version of a top-up insurance plan with one key difference. These plans calculate the deductible cumulatively across multiple claims in a policy year.

For instance, if your medical bills total ₹5L, ₹3L, and ₹2L across multiple hospitalizations, a super top-up plan will consider them together (₹ 11 lakhs) and automatically kick in. A top-up plan will treat each instance individually and not kick in. This makes them a cost-effective health insurance option for families that expect frequent hospitalizations. 

Top-Up vs Higher Sum: Base Health Plans vs Top-Up Covers

While both plans offer the same thing, insurance coverage, what you pay for that coverage is the biggest differentiator between them. A top-up plan can be considered the best health insurance option for families, as its premiums are significantly lower than those of a base plan with equivalent coverage. 

This is because premiums in top-up policies are calculated based on the additional sum insured and the deductible. Here is an example to show you the difference in premiums. 

Insurance Plan	Base Plan's Coverage	Top-Up Plan's coverage	Deductible	Premiums (approx in Rupees)
Higher sum insured base plan	15 lakhs	NA	NA	20,000–23,000
Top-up plan	5 lakhs	10 lakhs	5 lakhs	13,000–15,000

As you can see, the premium for similar coverage with a lower base plan, coupled with a top-up plan, is significantly lower than that of a single base plan with a higher sum insured. 

The Claim Process and Convenience Between the Two?

When it comes to higher-sum insured plans, the entire claim process is handled in one go with a single insurer. There are no threshold limits to worry about here, which makes it the best health insurance for families that anticipate emergency treatments and would like the claims process to be quick and straightforward.

When you hold a base plus a top-up plan combo, you do have to split the claim between the two policies, i.e., first under the base policy, and once the deductible is crossed, you file the remaining claim with the top-up provider.

The process is pretty smooth if both policies are from the same insurer, but it can get slightly more complicated when dealing with two different insurers.

Super top-up plans, especially when bought from the same insurer as the base plan, and depending on the insurer, allow a single claim submission even if you have tapped into both policies.

Which Plan Offers More Flexibility?

The most significant benefit of top-up health insurance is the flexibility it provides. Unlike standard plans, which only allow you to increase the base sum insured, top-up plans enable you to mix and match options based on your specific insurance needs.

For example, if you already have a corporate insurance policy from work of ₹3–5 lakhs, you can simply add a super top-up plan with a matching deductible to extend your total coverage to ₹10–15 lakhs without increasing your premiums significantly.

This layered setup (cover + base + top-up) is not only more affordable but also lets you scale your coverage gradually as your risk profile or the number of dependents increases.

What Are the Coverage Gaps to Be Aware Of?

While top-up plans offer a lot of flexibility while being affordable, they can leave coverage gaps if not structured well. This comes down to the deductible limit in top-up plans.

If your base policy does not cover the entire deductible amount, you will have to bear the shortfall between the base coverage and the deductible threshold out of your pocket. For example, if your top-up plan has a ₹5 lakh deductible but your base plan only covers ₹3 lakhs, you'll need to pay that  ₹2 lakh coverage gap during hospitalization.

While higher sum insured plans eliminate these issues, you must pay significantly higher premiums for the convenience. In short, always ensure that your base plan covers the deductible limit of your top-up plan.

Which Option Makes More Sense for Families?

The choice between a top-up and a higher sum insured in health insurance depends heavily on three factors: family structure, health risks, and your budget. For, 

• Young, Nuclear, and Healthy Families: A corporate plan via work, combined with a small base plan and a super top-up, is often the most cost-effective health insurance option for such families.

• Families with Older Parents: In this case, medical risks and the possibility of multiple hospitalizations are higher, so a family floater with a high sum insured will ensure that your entire family is covered without any deductible-related complications (the claim process will also be simpler). 

• Large Families with More Dependents: In this case, the cost of insuring each member under a higher base plan will be substantial. A family floater plan, combined with a matching super top-up plan, will offer wide coverage without high recurring costs, even in cases of multiple hospitalizations. 
  

When to Choose What?

Here is a quick checklist to help you determine which health insurance is best for your family.

Choose a higher sum insured if:

• You have older parents with pre-existing conditions.

• You prefer simpler claims without dealing with deductibles.

• Your family has a history of frequent or prolonged hospitalizations.

• You're looking for a single plan that covers all scenarios without additional add-ons.

• You don't already have any employer-provided health coverage.

Go for a super top-up if:

• You're under 40 and in good health.

• You have an employer health plan, but want extra protection.

• You want to control costs while still covering big medical bills.

• You can comfortably afford out-of-pocket expenses up to the deductible.

• Your family structure includes a few dependents and low ongoing health risks.
  

Final Words

A higher sum insured plan will give you the benefits of an easy claims process, but at a higher cost. For most families, however, a modest base plan with a supplementary top-up will provide the best of both worlds: sufficient coverage for most scenarios while being easy on the wallet. 

At AssetPlus, we help families and advisors structure more intelligent, more cost-effective health insurance portfolios by ensuring you're protected when it matters most without overpaying.

From comparing plans to simplifying the investment journey, our digital platform empowers you to make confident, data-backed decisions for your family's well-being. Connect with us for more info!

FAQs

Can I buy a top-up plan without a base policy?

No. A base health policy or employer coverage is required, as the top-up only kicks in after a certain threshold is met.

What's the difference between a top-up and a super top-up plan?

Top-up plans apply the deductible per claim, while super top-ups count all claims in a year to calculate the deductible, offering better coverage for multiple hospitalizations.

Is the claim process harder with two different insurers?

Yes, it may involve filing separately with both insurers. Choosing the same insurer for base and top-up plans simplifies the process.

Which is better for young families with work coverage?

A low-cost base plan, combined with a super top-up, is usually the most affordable and sufficient option for young, healthy families.