Archive / Investment Adviser (Level 2) / Non-Life Insurance Products
nism-series-xb-super-top-up-aggregate-deductible-nil[ INVESTMENT ADVISER (LEVEL 2) ]
Fahad holds a Base Health Policy of Rs. 3 Lakhs and a Super Top-Up Policy of Rs. 10 Lakhs with an aggregate annual deductible of Rs. 3 Lakhs. During the year, he incurs three separate medical claims: Claim 1 = Rs. 2 Lakhs, Claim 2 = Rs. 3 Lakhs, and Claim 3 = Rs. 4 Lakhs (Total = Rs. 9 Lakhs). How much total out-of-pocket expense must Fahad bear?
[ A ]Rs. 1 Lakh
[ B ]Rs. 3 Lakhs
[ C ]Rs. 6 Lakhs
[ D ]NIL[ CORRECT ]
Takeaway
Because the Super Top-Up's aggregate deductible of Rs. 3 Lakhs is satisfied cumulatively across Fahad's three claims, his total out-of-pocket expense is NIL, so option D is correct.
Derivation
In a Super Top-Up, the Rs. 3 Lakh deductible applies to the cumulative total of claims in the year, not to each claim separately. Claim 1 (Rs. 2L): Base pays Rs. 2L. Claim 2 (Rs. 3L): Base pays its remaining Rs. 1L, which exactly exhausts the Rs. 3L aggregate deductible; Super Top-up then covers the remaining Rs. 2L of that claim. Claim 3 (Rs. 4L): the deductible is already fully met, so Super Top-up pays the full Rs. 4L. Total paid by insurers = Rs. 3L (Base) + Rs. 6L (Super Top-up) = Rs. 9 Lakhs, matching total bills exactly, leaving zero out-of-pocket. This is the direct contrast case to Esther's standard Top-Up, testing whether candidates grasp why aggregation of the deductible is the single structural advantage of a Super Top-Up.
Why the others fail
A — Rs. 1 Lakh
Confuses the Super Top-Up's aggregate annual deductible with a single-claim top-up structure, which is the mechanic used in Dhruv's and Esther's cases, not Fahad's.
B — Rs. 3 Lakhs
Rs. 3 Lakhs is the deductible amount that is met cumulatively through the Base policy payments, not cash paid out of Fahad's own pocket.
C — Rs. 6 Lakhs
This is the out-of-pocket result under a standard Top-up policy with a per-claim deductible, as seen in Esther's case, not under Fahad's Super Top-up structure.
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