What Is Restoration Benefit In Health Insurance?

Mr. Shashank purchased health insurance of Rs 3 lakhs with restoration benefit from a reputed insurer a few years ago. Last year, he went for knee replacement surgeries and the entire sum insured amount (Rs. 3 lakh) got exhausted.

After a few months, he was again diagnosed with some kidney problems which required surgery and the cost of surgery was Rs. 2 lakhs. The insurance company offered the costs of surgery, pre-and post-hospitalization expenses and other medical expenditures of Mr. Shashank as the company has reinstated the original sum insured of Rs 3 lakh. This is because while purchasing health insurance plans, Mr. Shashank opted for restoration benefits in health insurance.

Many insurance companies are alluring their customers with some additional benefits like restoration benefits so that the customers won’t need to compromise with their treatment in case of healthcare emergencies.

What is restoration benefit?

The restoration benefit is a type of benefit when your sum insured gets restored up to the maximum limit by the insurance company if your sum insured gets exhausted after a claim. These days, many insurance companies are offering this benefit for individuals as well as families. This benefit is also called refill benefit and is available as an add-on cover with your current policy. This benefit is useful if you need a second hospitalization within the same financial year.

Now, you don’t need to worry about the sum insured even if you consumed the entire amount. Your insurance provider will reinstate the entire sum insured amount so that you can use it in future.

Types of Restoration/Recovery Benefit Health Insurance

1. Complete Exhaustion

This type of restoration comes into action when your entire sum insured amount is exhausted. Many health insurers offer restoration benefits for the complete exhaustion of the sum insured.

You have a policy of Rs. 5 lakh and you initiated a claim of Rs.4 lakh for your treatment. So, the remaining sum insured after the claim amount will be Rs 1 lakh. The restoration benefit will not be applicable for the second claim made the same policy year as your sum insured amount is not exhausted completely. The restoration benefit will be applicable when your remaining sum insured will be exhausted. Then, your entire sum insured amount will be fully restored by the insurer.

2. Partial Exhaustion

Here, your restoration benefit will get activated even after the partial exhaustion of the sum insured amount. This type of benefit is more effective for a policyholder.

You have initiated a claim of Rs. 4 lakh against your health insurance policy of Rs. 5 lakh. Your remaining sum insured amount is Rs. 1 lakh. Here, enters restoration benefit for partial exhaustion and your entire sum insured amount will be restored up to Rs 5 lakh. Now, you can utilize this amount for future claims.

Things To Consider When Purchasing Restoration Benefits

• While purchasing or renewing your health policy, you can opt for restoration benefits.
• Some insurers also offer this benefit as an add-on cover by paying some extra premium amounts
• You can’t carry forward the restored sum insured amount in the next policy year, even if you don’t use it in the policy year when it was restored.
• The total sum insured amount will be restored by the company even if you consume it in a single claim within the tenure period
• The company offers restoration benefits to any given sum insured, not only for the higher sum insured policies
• Restoration benefits can be used for future claims. You can’t use it for the first claim made in a policy year
• For a family floater plan, this is a valuable benefit. If your base cover gets exhausted, your family members can enjoy the benefits of the health insurance plan. But only one person at a time can avail of the benefits of restoration
• If you want to enjoy the maximum coverage at a low premium, you should incorporate the restoration benefit into your basic health insurance policy. Some insurance plans possess in-built restoration benefits, and for some, you need to purchase it as an add-on cover. But if you purchase it as an add-on cover, your premium amount will increase marginally.
• You can utilize the restoration benefit for an unrelated medical condition. Two family members can’t claim the restoration benefit for the same disease at the same time.
• Though some health insurers will offer you coverage for the same diseases during a policy year, other insurers only encourage the reinstated sum insured to be used by other family members for the same diseases.
• If you pay extra premiums, then a few companies will restore the sum insured on a gap of 30-45 days in case of the same disease.
• Some insurers embrace customers with the unlimited restoration of the sum insured in a policy year.

Does the restoration benefit increase the policy premium?

This benefit will enhance your premium amount, but will not burn your pocket. If a 34-year-old purchases a health insurance policy of Rs. 4 lakhs, then his premium amount will be Rs. 5,000 annually. But, for a restoration benefit, the premium will be Rs 6,000 annually.

What are the Advantages of Restoration Benefits in Health Insurance?

• You can enjoy the benefits of an additional sum insured amount under your policy within the same policy year
• If your policy offers in-built restoration benefits, then you can enjoy this benefit without paying any extra premium
• You stay better protected against any healthcare contingencies
• For a floater policy, restoration benefits will help all family members with an adequate sum insured amount

Conclusion

A health insurance policy with restoration benefits offers an array of benefits to policyholders. But compare all available plans before choosing the best health insurance plan for you.