Health insurance is an excellent investment towards securing your finances against possible medical expenses. To put it briefly, if you need to finance a medical emergency, the insurance company covers the cost, provided the particular emergency is included for coverage in your insurance. Here we talk about a must–know feature of your coverage, i.e., the reset benefit in health insurance.
What is reset benefit in health insurance?
A reset benefit is an add–on service offered by insurance companies. The insurer automatically restores the policy cover when you exhaust the entire sum assured during the policy year. After the first claim, the insurer will replenish the sum assured. If you need to finance a health–related expense after the first claim, the insurer will cover that claim too.
Here is an example:
Mrs Patil has health insurance, and the sum insured is Rs 10 lakh. Recently, she had surgery which cost her Rs 7 lakh. The insurance company paid the surgery cost within policy limits. Now, the balance sum insured is Rs 3 lakh. After a few months, Mrs Patil had to undergo another surgery that cost Rs 5 lakh. However, the insurance company will only accept claims within policy limits up to Rs 3 lakh and Mrs Patil will have to pay the remaining Rs 2 lakh from her own pocket.
To avoid this situation, Mrs Patil should have opted for a reset option at the time of the first surgery. The reset option is like a top–up or a recharge of your health insurance policy’s sum insured.
Things to know about the reset benefit
When opting for a reset benefit on your existing health insurance, here are things you ought to know:
The Reset Benefit is applicable from the second claim onwards. For example, Mrs Patil purchased a health insurance policy with a reset benefit, and the sum insured is Rs 10 lakh. If Mrs Patil undergoes surgery costing Rs 11 lakh, the insurance company will not bear the additional Rs 1 lakh. However, after the first claim, the reset benefit gets triggered.
The reset benefit cannot be carried forward to the next policy year even if you fail to utilise the policy in that policy year.
The sum insured for individual health insurance will differ from the family health insurance and will be on a floater basis for all insured persons.
The reset benefit is available only in India and is not applicable for global covers or getting treatment elsewhere.
The reset benefit will come into effect after 45 days of covering the first claim if the same illness occurs again. For example, Mrs Patil underwent heart surgery and made the first claim.
Case 1: After 10 days, some complications arose, due to which she had to be admitted again. Here, the reset benefit will not be applicable. If Mrs Patil was to be admitted after 45 days of the first discharge, she could claim the sum insured.
The reset benefit also comes into play if, within the 45–day cool down period, you need to cover medical expenses for a different illness.
Case 2: After the heart surgery, Mrs Patil had to undergo cataract surgery in 20 days. Here, the insurer will cover her surgery cost with the reset benefit (if required).
Since illnesses can be unpredictable, it is advisable to opt in for the reset benefit. Do ensure that your basic sum insured also suffices for the cost of treatment at your preferred hospital in your city.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.