What is difference between sum assured of a certain amount without top-up and same amount with a top-up? Kindly explain pros and cons.
Ans: Hi Dinesh, to answer your query, top-up plan is an additional sum assured over the base policy.
For example, if you have a base policy with sum assured of 5 lakh and a top-up policy over it with a sum assured of 10 lakh and you raise a claim for 7 lakh, the 2 lakh difference will be covered by the top-up plan. However, if you don't have a top-up plan you will have to pay it from your pocket.
Top-up plan can be subscribed to when you feel the sum assured value of your base policy will not provide enough coverage. There are no cons of buying a top-up policy; it is advisable that with age one increases their coverage amount to be on a safer side.