Do not buy a top-up policy for your company mediclaim!

Published: August 22, 2015 at 8:06 am

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Here is why you should not buy a top-up policy for your company mediclaim! If you are puzzled by that statement, let me clarify.

Mediclaim or a health insurance policy is a risk mitigation (not prevention!) tool.  A “company mediclaim”, or a group health policy taken by your company is a perk. It is pretty useful and one should use it when required .. without forgetting that it is a perk.

Meaning it can be modified or withdrawn at any time and will obviously change character when you change jobs. A group policy is a new policy taken each year by the management with the same insurer or a new insurer.

A risk mitigation tool should be a lot more permanent sounding than that!

The purpose of this post is to suggest:

1) Get a standard health insurance policy in addition to your company cover.  This could be an individual policy (preferable, if you can afford it) or a floater policy.

2) Use your company cover when required. If the expenses exceed the company cover, you can always use your personal cover to claim the remaining amount – either as reimbursement in cases expenses are unknown or via cashless by sending two applications (company+personal cover) at the time of hospitalization.

3) A top up cover, specifically a super top-up cover is certainly a good thing to have. However, top up your personal cover and not your company cover.

The reason for that is, super top-up policies kick in after a threshold. That threshold should be something that you control and not your employer.

As long as you are employed (employable!), you could probably get away with a super top up cover (not just top up) to your company cover. However, if you are laid off for an extended duration, cannot work due to disability or due to family commitments, or perhaps would like to freelance, you would be left hanging with a threshold.

It is prudent to buy a personal health cover at a young age (when the premium is typically low) and gradually increase the cover each year. If you delay buying such a policy, it may so happen that due to ailments, you or your dependents may be denied cover. The premium may be heavily loaded or the policy will be offered only on conditions of co-payments.

Risk mitigation should be layered the right way: The personal cover is indispensable and is your first layer of protection The super top is your second layer.

Top up your personal cover and not your company cover.

If you are looking to buy a personal cover, this post might be of help: How to buy a health insurance policy?

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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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  1. Absolutely important and valid advice. I have been advising all my relatives and friends to do this ( personal cover in addition to Employer’s cover ) and keep increasing the personal cover every year. It doesn’t make any sense to add a top-up or super-top-up to the employer’s cover. Thanks for the great service you are doing thru this blog.

  2. Absolutely important and valid advice. I have been advising all my relatives and friends to do this ( personal cover in addition to Employer’s cover ) and keep increasing the personal cover every year. It doesn’t make any sense to add a top-up or super-top-up to the employer’s cover. Thanks for the great service you are doing thru this blog.

  3. Thanks for the this thoughtful post … I used to wonder taking a super-top policy in addition to company cover is a very good option …Also, as you rightly pointed out, insurance should taken at an early age … now I’m facing difficulty in getting the same for one of my family member due to multiple ailments. If any body can give suggestion / guidance , regarding the same, it will be helpful for me.

  4. Thank You for sharing your experience…

    I have a query to clarify..

    For Example, I have Company cover for 5 Lac and Personal cover for another 5 Lac and I ended up with 6 Lac medical bill during hospitalization. If i send two applications ( Personal + Company ) won’t that get be rejected. Otherwise, Should i have to sumbit 5L to one and remaiing 1L to another one ?

    Thank You !!

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