If you’ve ever experienced the magic of a buffet restaurant, you know the joy of unlimited servings. You go up for seconds, thirds, or even more, knowing you can always refill your plate. Now, imagine if your health insurance worked the same way – refilling your coverage when it runs out. Sounds great, right? This is exactly what the ‘Restoration Benefit’ in health insurance offers.
A buffet lets you go back for more without worrying about running out of food. Right? Similarly, the restoration benefit refills or restores your sum insured once you use it up. In some policies, you’ll find this feature by default, while in others, it’s available as an optional benefit.
With today’s rising medical costs, a single major hospitalisation can quickly use up your entire cover amount, leaving you without coverage for the rest of the year. If you have a family floater policy, this could leave your entire family without health insurance protection for any subsequent hospitalizations.
This is where the restoration benefit comes into play. In this article, let’s quickly learn about what the restoration benefit in health insurance is, how it works, and much more.
What Is Restoration Benefit?
Restoration benefit, also called Restore, Reinstatement, Refill, or Automatic Recharge, is a health insurance feature that restores your sum insured after you use it up within a policy year.
Types
Restoration benefits in health insurance are of two types based on how much of the sum insured has been used:
- Complete Exhaustion: This type of restoration benefit activates only when you use up the entire sum insured. For example, suppose you have a health plan with a sum insured of Rs 5 lakhs, and you make a claim of Rs 4 lakhs. After this claim, you’ll have Rs 1 lakh left. If you make a second claim within the same policy year, the restoration benefit won’t apply unless you exhaust the remaining Rs 1 lakh as well. Only then will the restoration benefit kick in, fully restoring your sum insured to Rs 5 lakhs.
- Partial Exhaustion: This option is more advantageous as it activates even with partial exhaustion of the sum insured. For example, if you have a sum insured of Rs 5 lakhs and make a claim of Rs 4 lakhs, leaving you with Rs 1 lakh, the restoration benefit would immediately apply. The insurer will restore the sum insured to Rs 5 lakhs, ensuring you have the full amount available for any future claims within the same policy year.
Choosing a policy with partial exhaustion restoration can offer more comprehensive coverage and peace of mind.
Benefits
If you’re considering buying a health insurance plan, opting for one with restoration benefits can offer significant advantages. Here are some key benefits:
- Enhanced Financial Security:
A restoration benefit ensures that your sum insured replenishes once you exhaust your initial coverage. This means you have an additional financial safety net to cover unexpected medical expenses that may arise within the same policy year.
- Offers A Sense Of Peace:
Having a health insurance policy with restoration benefits ensures you have additional financial security. This means you can confidently face any unexpected medical expenses, knowing that your coverage will be restored if you exhaust it, offering you peace of mind throughout the policy year.
- Ability To Make Multiple Claims:
With restoration benefits, you can file multiple claims in a single policy year. This is especially beneficial for individuals with chronic conditions or those who need frequent medical attention. It ensures continuous coverage without the worry of depleting your insurance limit early on.
- Cost-Effective
While health insurance policies with restoration benefits might have a slightly higher premium, they offer better value in the long run. This feature provides additional financial protection without the need to purchase an extra plan.
Things To Know Before You Opt For The Restoration Benefit In Health Insurance
- Restoration Activation
Restoration kicks in when you’ve used up your base sum insured and any bonus you might have in a policy year. Depending on your policy, restoration can either activate only when you’ve exhausted your entire sum insured or even with just partial exhaustion of the sum insured.
- Restoration Amount
The restoration benefit typically refills the sum insured up to your base policy cover, usually by 100%.
- Restoration Frequency
Generally, the restoration benefit can be triggered only once a year, although some plans offer unlimited restoration. Regardless, the maximum amount you can claim during any hospitalisation can’t exceed your base sum insured (plus any bonus). Keep in mind, the restored sum insured doesn’t carry over to the next policy year – it resets annually once used.
- Scope Of Coverage
In some policies, the restoration benefit is only available for ‘unrelated conditions’. This means you can claim it if your second hospitalisation is for a condition that’s not directly related to your first one. Additionally, family floater policies might stipulate that the restored amount can only be used by a different family member or for a different illness.
- Additional Conditions
In some policies, restoration may not apply to your first claim of the policy year. This means you can’t use the restored sum insured for your initial hospitalisation of the year.
Summing Up!
The restoration benefit in health insurance is a valuable feature that can significantly enhance your financial security and peace of mind. By replenishing your sum insured after it gets exhausted, it ensures you and your family are continuously protected against unforeseen medical expenses throughout the policy year. Whether it’s a single major hospitalisation or multiple claims within a year, having a restoration benefit means you won’t be left vulnerable once your initial coverage is used up. As healthcare costs continue to rise, opting for a policy with this feature can offer a more comprehensive and cost-effective solution.
