Restoration Cover in Health Insurance

The restoration benefit is an add-on provision in health insurance policies that restores the sum insured amount once the primary sum insured has been used within a policy year. This option could be helpful for policyholders who may need to use their initial covered amount because of recurrent illnesses or hospital stays.

Let’s understand this with an example - Mr. Ravi has a health insurance policy of Rs 4 lakhs with a restoration benefit. He had to undergo heart surgery and the entire sum insured of Rs 4 lakh was exhausted.

A few months later, Mr. Ravi was diagnosed with Cancer, which required surgery costing around Rs 2 lakhs. The insurer will cover the cost of surgery, hospitalization and medical treatment for Mr. Ravi as the original sum insured will be restored to Rs 4 lakhs. This was possible only because Mr. Ravi opted for a Restoration Benefit while purchasing his health insurance policy.

There are two types of restoration options available and we suggest you must read the fine print of your health insurance policy before opting for either one of them. It includes partial exhaustion and complete exhaustion in health insurance.

1. Partial Exhaustion:

Partial Exhaustion in health insurance refers to the situation where a policyholder (you) uses up only a portion of the total coverage limit during a policy year. Even when you make a claim, there remains some amount for your sum insured in health insurance, which can still be used for future claims.

For example, if you have ₹10 lakh of sum insured and you only claimed ₹3 lakhs, then it will come under partial exhaustion. In this case, the total amount of ₹10 lakh of the sum insured will be restored.

2. Complete Exhaustion:

Complete Exhaustion in health insurance occurs when a policyholder utilizes the entire sume insured available under thier health insurance policy in a given policy year. In this, once the total coverage limit is exhausted, no further claims can be made during that policy period and any other medical expenses will be paid by your pocket until restored.

For example, if you have ₹10 lakh of sum insured and you claimed the total amount, then it will come under complete exhaustion. In this case, the total amount of ₹10 lakh of the sum insured will be restored.

To make an informed decision, you must know what is restoration of cover in health insurance policy means and the clauses associated with it. Some of the common features include:

• The restored sum insured is not transferred over another policy year. It means that you can claim the restoration benefit only in the particular policy year in which you have claimed it previously.
• You can purchase the restoration benefit as an add-on to your health insurance coverage just for a small additional premium.
• Restored benefits are only available for future claims; they do not apply to existing or pending claims.
• Restoration benefits can be added to your health insurance policy depending on your health requirements, and it is not limited to a higher sum-insured policy.

Restoration Benefit coverage is a unique feature of the insurance plan that offers policyholders a safety net beyond standard coverage. Let's discuss the main benefits of Restoration and see how it can help individuals like you.

1. Continuous Coverage:

The restoration benefit guarantees that even if your initial sum insured is used, you will still receive health care for the rest of the policy year. This is especially helpful if you have an unanticipated medical emergency or serious illness that increases the chances of long hospital stays.

2. Financial Security:

Unexpected medical expenses could be more than the sum insured. The restoration benefit gives policyholders, aka you, an extra degree of financial stability to pay for unanticipated medical costs without worrying about using up all of your coverage.

3. Flexibility:

The restoration benefit makes health insurance policies more flexible. It enables you to handle unforeseen medical crises without worrying about running out of coverage. This flexibility is extremely helpful in a family floater plan that covers several members needing medical attention.

4. Affordable:

Insurance companies hope to give you a cost-effective alternative by providing restoration benefits. When necessary, you can rely on the restoration benefit to refill your coverage rather than buying a bigger sum insured policy.

While the restoration add-on might not be suitable for everyone, it makes sense for some people in some groups. If any of the following categories apply to you, you must consider having a plan that has restoration benefits:

• People who have previously suffered from several diseases.
• Require regular medical care & treatment.
• Need extra financial security in health insurance policy.
• Want to avoid the hassle of buying a new insurance.

Furthermore, we advise you to buy this add-on benefit while purchasing a family floater policy to enjoy maximum benefits of your policy. This benefit will suit your Family Floater plan as it adds tangible value.

For those less aware, the cover 'floats' between family members in family floater plans. In such policies, the restoration benefit feature comes in handy.

For instance, you have a floater plan with a Sum Insured of Rs. 4 lakhs, and your spouse falls ill, consuming the entire coverage. Unfortunately, if another family member gets hospitalized later in the same policy year, this feature would help you in this situation by restoring your Sum Insured.

In recent years, insurance companies have included new features to improve the reach and usefulness of health insurance plans. Restored benefits are one such feature that is becoming increasingly popular. Some pros of getting restoration of coverage in health insurance include:

1. Increased Protection without Adding Higher Premiums:

Most health policies require you to pay for further medical costs after the policy's maximum benefit has been used up. However, a policy with restoration benefits provides continuous protection at an affordable premium.

2. Financial Security Against Multiple Health Issues:

Health problems can surprise you at times. In these circumstances, restoration benefits offer financial safety. These benefits guarantee that you have the required coverage for a variety of medical problems.

3. Flexibility in Coverage:

Restoration benefits provide flexibility in how coverage is used. Depending on the type of restoration benefit (fixed or partial), you may have all or a portion of the whole sum insured to use again upon exhaustion.

4. Avoiding Coverage Gaps:

Traditional health insurance policies may include coverage gaps, particularly for people with chronic problems. Restoration benefits serve as a guard that prevents coverage gaps by providing the sum covered and guaranteeing ongoing protection for the policy year.

5. Cost-Effective Option for Higher Sum Insured:

Restoration benefits offer a more affordable option than choosing a larger sum insured because you need to pay a higher premium for a higher sum insured.

When choosing health insurance with a restoration benefit, you're not just investing in your health but in peace of mind. But before you make a decision, it's important to consider a few factors that can help you make an informed choice of having restoration benefits in your policy.

• Restoration benefit will trigger for an unrelated medical condition.
• It is an Add-on benefit which you can buy with your insurance policy.
• It can be taken while buying a policy with nominal extra cost.
• Restoration will happen on exhaustion of complete sum insured or partial sum insured.
• Restored sum insured is not liable to be carried forward to the next policy year.
• Restoration benefit will not apply in the first claim.
• It can be applied to any given sum insured and is not restricted to the higher sum insured.
• Restore benefit reinstates the total sum insured once you exhaust it in a single claim within the policy term.
• Restore Benefits are only for future claims.

Yes, the restoration benefit increases the premium amount, but only up to a minimal extent. This is an extra cost that an insured person bears for the additional cover.

One of the thumb rules for determining the premium of an insurance policy is that the more features a policy has, the higher its premium. The same happens when you add the restoration benefit feature to your policy.

For instance, a Rs 4 lakh insurance plan would cost a 34-year-old a little more than Rs 5,000 annually, while a plan with restoration benefits would cost more than Rs 6,000.

Recharge benefit is a feature that restores your sum insured within the policy year so that you don’t run out of coverage. So, if you first get hospitalized and use up most of your sum insured, you get a recharge for extra protection due to some other health issue in the same year.

Imagine you have 1 GB of data for the day but have exhausted it before the day ends. What will you do? You will top-up with an extra 1 GB of data for the day, allowing you to keep using the internet. Recharge benefits work similarly in a health insurance policy.