All About Reinstatement in a Health Insurance Policy: How Does It Work?


All About Reinstatement in a Health Insurance Policy: How Does It Work?

The most fundamental aspect involved in a health insurance policy is the sum insured, i.e. the total amount of the health cover. The health coverage amount is the key inducement for which any individual regularly pays the premium.

But, what if the sum insured gets exhausted due to the claims made for hospitalisation expenses? 

It is quite possible that the hospitalisation expenses can go as high as the entire health coverage available to you. So, if you happen to meet an unfavourable incident, where you are compelled to pay  a hefty amount, your policy may possibly run out of the basic  coverage. In such a situation, there is a provision called “reinstatement in health insurance”, that helps you regain your previously used up sum insured. 

In this article, you will learn what reinstatement in health insurance is, and how reinsurance provision in a health insurance policy is useful.

What Does Reinstatement in Insurance Mean?

The word “reinstatement” means restoring a former position that has been terminated. Reinstatement in insurance parlance simply refers to restoring an insurance policy which is terminated. If a policyholder fails to duly pay the premium despite being given the grace period, his insurance policy gets terminated. However, s/he can revive the terminated policy within the revival period by payment of the pending premiums, after which the insurer reinstates his/her policy.

Now that you know what reinstatement stands for, let’s consider understanding how reinstatement works in case of health insurance.

What Does Reinstatement in Health Insurance Mean?

The phrase 'reinstatement of health cover' suggests an individual's health insurance cover is reinstated or restored in case of lapse of the policy. Reinstatement in health insurance happens due to various reasons including:

  • Non-payment of the outstanding premium(s).
  • Change in the health conditions leading to denial of coverage.
  • Misinterpretation of facts to the insurer
  • Change in the policy features & benefits

However, the most common scenario that requires reinstatement of health insurance is the exhausted sum insured due to claims made during a policy year.

If you have made claims in your health insurance plan during a policy year and ultimately utilised the maximum limit of the Sum Insured provided, you will run out of your health coverage.

In such a case, your health insurance policy has a reinstatement clause, which ensures that the insurer will entirely reinstate your base sum insured immediately and unlimited times during that policy year. As a result, your health coverage gets restored, and you can reuse it for further claims.

When Does Reinstatement in Health Insurance Occur?

Reinstatement in health insurance plans occurs when you have entirely used up the basic health insurance limit. 

Considering the soaring medical costs  there is always a risk that your sum insured will be entirely used up during a claim. In such a situation, you will simply be left without any further coverage until you renew the policy. For such an odd situation, there is a reinstatement clause in health insurance that allows you to restore your basic sum insured during the policy year.

How Does Reinstatement Provision in a Health Insurance Policy Work?

If you have exhausted your policy sum insured limit during a claim, just relax. Your insurance provider is here to take care of it!


Well, with the reinstatement feature, the policy sum insured gets to its original value the moment it is exhausted. However, the recharged sum insured can only be utilised further for hospitalisation expenses due to illness or accidental emergency. Remember that the already utilised recharged cannot be carried forward to the next year. Kindly refer to the policy document for detailed information regarding the reinstatement clause.

How Long Can I Use the Reinstatement Value?

Upon reinstatement, your health insurance policy will hold for a period, generally extending from the first hospitalisation date when you claimed to the last expiry date.

Can I Use the Reinstatement Value for the same illness again?

Yes, you can utilise the recharged amount for any illness or injury in the case of a family floater policy pertaining to that Policy Year. However, the reinstatement value can’t be used for the same person and the same illness.

Wrapping it up

There are a number of insurance jargons that may appear alien to us. By knowing their actual meaning and purpose, you can enjoy the most of your insurance benefits. Reinstatement in health insurance is one such feature that has an immense importance. It comes to your rescue when you need the policy the most. So, understand the policy fine print thoroughly to avoid any consequences at the time of claiming your health insurance.

>> Also Read: 7-Step Guide to Fill Health Insurance Reimbursement Form

Disclaimer: All plan features, benefits, coverage, and claims underwriting are subject to policy terms and conditions. Kindly refer to the brochure, sales prospectus, and policy documents carefully.

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