What Is Restoration Benefit?
The restoration benefit in health insurance is an important feature that replenishes your coverage amount once it has been partially or fully utilized within the same policy year. Sometimes called the reinstatement benefit, this feature ensures that your coverage can be refilled, giving you additional protection without buying a new policy.
How It Works in Health Insurance
If your claims use up your entire coverage limit, the restoration benefit automatically restores your available sum insured so you continue to have protection. Depending on your policy, this can happen either after the entire sum insured is used (complete exhaustion) or even after partial usage (partial exhaustion). This means your restoration of sum insured allows you to continue making claims without worrying about running out of coverage during the policy year.
Restoration Benefit vs No-Claim Bonus: What’s the Difference?
While the restoration benefit in health insurance restores your coverage after it’s used, the No-Claim Bonus (NCB) rewards you for not making claims by offering premium discounts. If you make a claim, your NCB can reduce or reset, but with restoration, you get additional sum insured regardless of claims.
How Restoration Benefit Helps You During the Policy Year
The restoration benefit offers enhanced financial security by replenishing your sum insured, so unexpected medical expenses won’t leave you uncovered. It enables multiple claims within the same year and provides peace of mind, especially for those with chronic illnesses.
Example to Illustrate
Imagine you have a policy with a sum insured of Rs 5 lakhs. You claim Rs 4 lakhs for a hospitalisation, leaving Rs 1 lakh balance. With partial exhaustion restoration, your sum insured is immediately restored to Rs 5 lakhs, so you have full coverage for any further treatment within the year.
When Restoration Benefit Is Activated
The restoration benefit in health insurance activates once you exhaust your base sum insured (and any bonuses). Certain policies restore coverage only after total depletion, while others do so after partial depletion.
Is Restoration Benefit Available in All Policies?
The restoration benefit is not available with all health insurance plans. It is often an optional add-on or a feature included in select comprehensive policies.
Insurance Companies’ Role
Insurance providers decide whether to include the restoration benefit and under what conditions. Restoration may be limited to illnesses that are unrelated, or it may have restrictions in family floater policies.
How to Know If Your Policy Has It
Check your policy documents for terms like “restoration,” “reinstatement benefit,” or “automatic recharge.” You can also ask your insurer directly to confirm if the restoration benefit in health insurance is available.
Conclusion
The restoration benefit in health insurance allows the sum insured to be replenished once it’s exhausted, ensuring uninterrupted coverage for the rest of the policy year. It offers peace of mind, allows multiple claims, and helps manage rising healthcare costs more effectively. Understanding the restoration benefit helps you choose policies that truly safeguard your financial health. Always review your insurance terms carefully by consulting your insurer or looking out for an unbiased advisory app like CoverSure.
