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Medical emergencies can quickly exhaust your health insurance sum insured, especially with rising healthcare expenses. This is where the health insurance restoration benefit becomes useful.
Also known as restoration of cover or recharge benefit, this feature helps restore your sum insured after it gets partially or fully exhausted during a policy year.
Understanding what restoration benefits in health insurance can help you choose better financial protection during unexpected medical situations.
What is the Restoration Benefit in Health Insurance?
Restoration benefit in health insurance is a feature that restores your sum insured after it gets exhausted during a policy year. Also known as restoration of sum insured in health insurance, this benefit helps policyholders continue receiving coverage for future medical expenses.
In today’s world, a single diagnostic test can cost between ₹500 and ₹15,000. This benefit proves fruitful in cases where your entire sum insured is exhausted after a claim.
For example, if your health insurance policy has a sum insured of 5 lakhs and during your hospitalisation, the entire sum insured gets exhausted. The restoration benefit will restore your original sum insured back to ₹5 lakhs within the same policy year.
What is Restoration of Cover in Health Insurance?
Restoration of cover in health insurance refers to reinstating your original sum insured after it has been used during a claim. This feature helps ensure continued financial protection during the same policy year.
The restored amount can usually be used for future hospitalisation expenses according to the policy terms and conditions.
Why is Restoration Benefit Important?
Medical treatments and hospitalisation expenses are increasing rapidly. In some cases, even a single hospitalisation can exhaust the entire sum insured amount of a health insurance policy.
Restoration benefits in health insurance provide additional financial support by restoring the exhausted sum insured, helping policyholders continue receiving coverage for future medical emergencies.
Types of Restoration Benefits in Health Insurance
There are several types of restoration benefits for the sum insured.
- Fixed Restoration Benefit: Under this benefit, the insurer restores the original sum insured once it is exhausted during the policy year.
- Partial Restoration Benefit: This feature allows partial restoration even if the entire sum insured has not been completely used.
- Unlimited Restoration in Health Insurance: Unlimited restoration of cover allows the insurer to restore the sum insured multiple times within the same policy year, subject to policy terms.
Automatic vs Manual Restoration: What’s the Difference?
Are you curious about the fundamental differences between automatic and manual restoration? Understanding these distinctions can help you choose the right method for your needs. The basic difference between the two is here:
- Automatic Restoration: The insurer automatically restores the sum insured once it is exhausted.
- Manual Restoration: The policyholder may need to request restoration or fulfil certain conditions.
Automatic restoration is generally more convenient for policyholders.
Key Benefits of Restoration in Health Insurance
Having a health insurance plan with restoration benefits comes with advantages such as:
- Extra Coverage: After the basic sum insured is exhausted, an insured can obtain an extra sum insured with restoration benefits. This is helpful in case of an accident or an existing illness.
- Shared Among Family Members: All family members can use the restoration benefit add-on amount in the family floater plan.
- Continuous Protection: With this benefit, health coverage remains uninterrupted. You continue to get protection from your health insurance company even after your SI is exhausted.
- No Emotional Stress of a Financial Crisis: You can drop off your financial worries as the renewed coverage provides a safety net during a medical emergency.
How Does Restoration Benefit Work?
When the original sum insured is exhausted during a policy year, the restoration benefit becomes active and restores the coverage amount in accordance with the policy terms.
Depending on the policy, restoration may apply after the sum insured is partially or completely exhausted.
Who Should Choose Restoration Benefit?
Restoration benefits can be useful for:
- People with family floater plans
- Individuals with low sum insured coverage
- Senior citizens with higher medical needs
- Policyholders seeking extra financial protection
This feature helps improve coverage during multiple medical emergencies within the same year.
What Should You Know About the Restoration Benefit?
Here are a few highlights of a restoration benefit that you must know:
Who Should Invest in the Restoration Benefit?
Anyone willing to invest can invest in the restoration benefit. Ideally, restoration in medical insurance is most beneficial for people with a family floater plan or a low-sum-insured health plan. The chances of exhausting the original sum insured are higher in both cases.
Carrying Forward the Restoration Benefit
Unlike a no-claim bonus, the benefit restoration plan cannot be carried over to the next policy year; the unused restoration benefit lapses with the end of the policy tenure.
Unlimited Restoration of Health Insurance
Unlimited restoration in health insurance allows the insurer to refill the sum insured multiple times during the same policy year. This feature provides stronger financial protection during repeated hospitalisations or multiple medical claims.
Some Care Health Insurance plans offer unlimited restoration benefits for enhanced financial support during medical emergencies.
No Sum Insured Cap
You don't need a high-sum insured health plan for the restoration benefit. There is no cap on the minimum or maximum sum insured in a health plan to be eligible for the reinstatement benefit. So, anyone willing to purchase the additional cover of the restoration benefits can do so.
Things to Check Before Buying Restoration Benefit
Here are certain things you must check before making a purchase of restoration benefit:
- Waiting Period: Some policies may allow restored coverage for the same illness only after a specified waiting period.
- Restoration Limit: Certain policies restore the sum insured only once during the policy year, while others offer unlimited restoration.
- Exclusions: Specific treatments and pre-existing diseases may not be covered under restoration benefits.
- Claim Process: Always choose an insurer with a smooth and transparent claim settlement process.
Does Restoration Benefit Increase The Policy Premium?
Yes, the restoration benefit is an add-on benefit, which means you have to pay an extra amount to receive it. If a person has purchased an individual health insurance plan and wants to purchase restoration benefits, their premium may increase to some extent. The restoration benefit add-on depends on factors such as the type of policy bought, the SI's age, and the SI's health history.
>>Also Read: Benefits and Coverage under Health Insurance
Restoration Benefit vs No Claim Bonus
Restoration benefit and no-claim bonus are distinct features in health insurance policies.
A restoration benefit helps refill the sum insured after it gets exhausted during a policy year. In contrast, a no-claim bonus increases the sum insured as a reward for not making claims during the previous year.
While restoration benefits provide support during medical emergencies, no-claim bonuses help increase coverage over time.
Restore Your Financial Protection!
Restoration benefits can be a game-changer when the sum insured is exhausted, and further medical treatments are lined up. Instead of draining your savings, investing in a reinstatement benefit that fills back your sum insured for additional use is better.
People with health plans with a relatively low sum insured, or those with a family floater plan where the risk of losing the sum insured is higher, may consider investing in a restoration benefit.
Not just for them, restoration benefits in medical insurance can be a crucial investment for anyone, since you can never predict future health needs and emergencies. As mentioned above, some of our health plans offer unlimited restoration benefits that help you focus on your treatment while letting the insurance company manage expenses.
Disclaimer: The above information is for reference purposes only. For more details about the health insurance plans and their benefits, please refer to the sales prospectus and the policy terms and conditions.
