What is Top-up Premium?
It is an amount that is over and above the regular premium of an insurance policy and may be paid at irregular intervals. Top-ups are paid only during the term of a policy provided all the due regular premiums have been paid. This provision can be a useful channel for investment of any windfall gains like salary bonuses or dividends paid by companies that may come your way. Some insurance policies do not have a minimum amount for the top-up premium. Most policies, however, have a minimum amount which starts from as low as Rs 2,000. How Much Can a Top-up Be? There is no limit on the top-up amount. However, any amount paid in excess of 25 per cent of the cumulative premiums paid till then will be directed to buy you an insurance cover that is 125 per cent of the excess amount. In unit-linked pension policies, however, any amount paid in excess of the regular premium is considered as a top-up. Top-ups are not used to buy an insurance cover for people holding pension policies as they focus
