Is it worth opting for Health Insurance Restoration Benefits

Priyanka Sehgal just got discharged from the hospital after getting treated for COVID-19. Thanks to her health insurance policy, she managed the treatment costs without spending much from her pocket. However, after three months, she was diagnosed with appendicitis and was advised of an immediate operation. Priyanka was left in a tight spot as she had used her health insurance coverage completely, making her fund the operation from her savings. This could have been avoided if she had opted for a restoration benefit in health insurance that would have restored the coverage value after using it during a particular year. After understanding this, she chose to include restoration benefits in her existing policy and suggested her family members select it for their floater policy.

With increasing awareness of COVID-19 in India, there is also a growing demand to purchase health insurance that offers higher sum insured due to the increasing healthcare costs. Although there are a variety of insurance policies that provide a high amount of coverage, there is always a requirement among policyholders for their health insurance policies to restore the coverage if you use the whole amount within a year.

What is the Restoration of Cover in Health Insurance?

Restoration benefit of the insurance coverage is a feature provided by health insurance companies wherein the insurance company restores the sum insured to the policyholder’s base policy after they have fully exhausted the coverage amount for treatment of any previous illnesses.

It is indeed a benefit that, even if you happen to use the entire sum insured, you don’t have to worry about losing your insurance benefits as they will be restored, and you could utilize them in the future.

The Necessity of Restoration Benefits

Purchasing a health insurance policy with a restoration benefit makes a lot of sense. It’s also the best option rather than buying an additional health policy to cover your extra medical needs. For example, let us say that you had bought a family floater health insurance plan for your family that covers all the members. Suppose one member in the family falls sick and uses the entire coverage of the floater plan for a costly treatment. In that case, other family members will not to able to use the cover if they become sick within that particular year. But with restoration benefits in place, there is no need to be worried at all. Therefore, experts recommend adding a restoration option to make the most of your existing health insurance policy.

To help you make a better decision, here are some of the important benefits of choosing to opt for restoration benefit with your health policy:

1. The restore benefit can increase the amount of coverage that is available under the health insurance plan, which enables you to enjoy the additional sum insured while getting treatment for unrelated illnesses.
2. Many health insurance plans come with an inbuilt restore benefit as part of the standard feature of the policy. Thus, you’re no longer required to shell out an extra premium to avail of this additional coverage.
3. The restore benefit guarantees that your existing insurance plan will not fail at the most important times of settling your high medical bills.
4. With a family-based floater, the restore benefit is extremely beneficial. It guarantees the sum insured to cover all the individuals in the family, even if anyone ends up using the entire value of cover.

Things to note with restoration benefits: Before moving to purchase a health insurance plan that has a restoration benefit, you should be aware of the following terms and conditions:

• Suited only for unrelated conditions: A majority of health insurance policies that provide restoration benefits require that the second claim following the first one must be unrelated. It simply means the claim shouldn’t have any relationship with the initial claims made or else, the restoration benefit will not be applicable.
• Amount of restoration: Many insurance companies offering restoration benefits permit 100 percent of the restoration of the sum insured, but certain policies limit this amount to only 50% of the sum insured. During such situations, you are required to pay the remaining amount from your pocket.
• Carry forward restoration benefits: The reinstatement of the sum insured is not transferable to the next year. Therefore, any benefits you may have earned this year after the expiration of your current limit have to be used in the particular year, or else it becomes void.
• Premium cost: The premium of the health insurance policy with restoration benefits is slightly higher than policies that do not offer benefits. However, when we consider the benefits of restoration, the price isn’t excessive and can be described as economically advantageous. For instance, if a 2 lakh health insurance policy has a premium cost of Rs 6000 for a 34-year old person, it’s likely to cost at least Rs 7000 as a premium per year in the case of a plan with restoration benefits. Though the premium is high, it makes perfect sense to buy a health insurance policy with an in-built restoration facility initially instead of waiting for your base policy to exhaust and then purchase a new one.

The policy cover restoration benefit in health insurance is a welcome addition to your existing health insurance cover, even if the insurance company doesn’t offer it to its policyholders by default. While some insurers provide this feature as part of their standard packages, others do not.

When purchasing family floater policies, it is best to buy a suitable health insurance policy with restoration benefits as it benefits every family member. Similarly, if you suffer from an existing condition and are prone to frequent illness and/or accidents, you must choose the restore benefit so that, in the event of frequent claims, the amount you are insured doesn’t exhaust at the time of need. Having read about what is meant by restoration, its benefits, and terms associated with restoration of cover, we suggest that you talk to your insurance advisor while choosing the right health insurance plan for yourself and your family members.