With rising health and medical care costs, buying an adequate health insurance policy is necessary today. This has caused growing awareness and demand for health insurance plans in India. Along with increased demand for high-sum-insured policies, features that improve coverage, such as restoration benefits, have become increasingly popular.
What is the restoration benefit in health insurance?
Restoration benefit is a facility where the insurance company reinstates the sum assured of your insurance cover to its original amount once exhausted. So, even if you consume the entire sum insured, there's no need to worry. With this feature, you have the advantage of restoration of your sum insured, which you can use in the future.
For a more precise understanding, let's take an example. If the policy has a sum insured of Rs. 5 lakh and the coverage is utilised on a claim, the restoration benefit will restore the total insured to Rs. 5 lakh if another claim is filed during the same policy year. The restored sum insured can then be utilised to pay for further claims within the same policy year.
Why is it necessary for health insurance policies to provide a restoration benefit?
Considering the rising healthcare costs, it is quite possible that the entire sum insured gets exhausted in the event of hospitalisation, and this is when 'restore benefit' in a health insurance feature comes to the rescue. Having a plan with a restoration benefit will serve as a safety net at this time, providing additional coverage if necessary. As a result, it is crucial to choose wisely and include a restoration benefit in your health insurance policy.
Types of restoration benefit
There are two types of restoration alternatives available, and before choosing one, the policyholder must study the fine print of their health insurance policy:
● Complete exhaustion of the sum insured- In this case, the benefit can only be availed once the entire sum insured is exhausted
● Partial exhaustion of the sum Insured - In this option, the benefit will come into force even with partial exhaustion of the sum insured
Who should take advantage of the health insurance plan's restoration benefit?
Restoration benefits can help keep unexpected medical costs in check. Family health insurance plans should include a restoration benefit when you buy a recovery benefit in your family floater plans, the cover 'floats' between family members. The restoration benefit feature comes in handy in these situations.
The terms and conditions of the restoration benefit are as follows:
Applicable for unrelated illnesses - Most health insurance plans that offer the restore benefit will only allow you to use it if your subsequent claim is for an unrelated sickness. This indicates that the second claim should have nothing to do with the first. The restoration feature will not work if this is the case.
Complete utilisation of the sum insured - The restoration provision is available under most plans if the sum covered is depleted. The restore function would not apply to the second claim if the sum insured was still open.
Restoration amount - Most plans allow for a complete restoration of the insured amount. Some programs may cap this proportion at 50%, while others may qualify for up to 200% restoration. Furthermore, some plans allow you to increase the restoration amount by purchasing an add-on.
When choosing restoration benefit, keep the following aspects in mind:
● Restoration benefit is an optional benefit that you can purchase in addition to your insurance coverage.
● It is available for an additional fee while purchasing the base insurance plan
● Restoration will happen on exhaustion of complete sum insured or partial sum insured
● The restored sum insured cannot be carried forward to the following policy year
● Restoration benefit will not apply to the first claim made in the policy year
● It is not limited to the larger sum insured; it can be used on any sum covered
● Restore benefit reinstates the total sum insured once you exhaust it in a single claim within the policy term
● Only future claims are eligible for restore benefits.
Make an informed decision while buying a health insurance policy for yourself and your family. Choose the restoration benefit in your health insurance policy.
