Restoration Benefits in Health Insurance
The growing number of chronic diseases and rapidly increasing healthcare costs must have often left you thinking aloud whether your health insurance coverage is enough or not.
What would happen if the sum insured of the health plan falls short? How can the sum insured be increased without burning a hole in the pocket? If you have these questions in mind, take a look at the restoration benefit in health insurance.
What is restoration benefit in health insurance?
Restoration benefit is an add-on cover to enhance your health cover if required. As the name suggests, it restores or replenishes your original sum insured if you have exhausted it due to hospitalisation or other expenses.
It can be seen as a recharge of your sum insured amount so that your health insurance policy provides you ample coverage in case you need hospitalisation twice within a policy year.
For example, you have a health policy with a sum insured of Rs. 5 lakh. You fell ill and had to undergo a sudden surgery. Your hospital bill was over and above Rs. 5 lakh and you ended up consuming all your sum insured.
A few months later during the same year, you were hospitalised again for a treatment, paying a bill of Rs. 2 lakh this time. If you would have the add-on restoration benefit cover, then your sum insured would be reinstated to Rs. 5 lakh. And your policy would be able to cover your second hospitalisation as well.
Without the restoration benefit, your policy would fail to provide you any financial assistance as you have already used your sum insured. So, you will pay the hospital bill from your pocket.
It is important to note here that the restoration benefit can increase the premium price of your health policy since it is an add-on cover. But the additional premium is less compared to what you would have paid if you wanted to double the sum insured you already have.
Key conditions to know before using restoration benefit in health insurance
Why would anyone buy a health policy with higher sum insured when they can simply opt for lower sum insured with restoration benefits by paying a little extra premium?
That’s because restoration benefit comes with certain conditions that you should be aware of:
-- Restoration benefit cannot be used for your first claim during the year. It means that even if your sum insured is completely exhausted during your first hospitalisation and you need more money to pay the bills, the restoration benefit would not help. It will cover you only for the second hospitalisation or future claims within the same policy year.
-- In most cases, restoration benefit is only available for future claims that are not related to the illness for which a claim has already been paid during the same year. Some insurers have relaxed this condition, but they still demand that the two hospitalisations should be 30-45 days apart to get the restoration benefit.
-- The sum insured restored cannot be carried forward to the next policy year if you have not consumed it completely within the same year.
Types of restoration benefit
Complete exhaustion: This type of restoration benefit comes into play only when the entire sum insured is exhausted up to the last penny. So, even if you have just Rs. 10,000 left from the sum insured of Rs. 5 lakh after your first hospitalisation, you cannot get the restoration benefit for your second hospitalisation.
Partial exhaustion: This type of restoration benefit is more helpful for policyholders as it can restore the entire sum insured even on partial exhaustion of the base sum insured.
Restoration benefit is an extremely useful add-on cover for your health insurance policy, especially if you have a family floater plan. If any one family member gets hospitalised and uses the entire sum insured, having a restoration benefit replenishes the sum insured amount and protects the other family members for the rest of the year. This benefit would help you keep your premium expenses in check while providing you maximum possible coverage.
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.