Health Insurance

Are You Aware Of Health Insurance Restoration Benefits

Nov 16, 2021

Restoration Benefit is said to be a benefit in which your insurance provider would restore the original sum insured after it gets completely used up during the treatment of various illnesses. So, by the restoration benefit your health insurance cover would be resuming to the same or even more if the sum insured has been utilised as per the scope of your health insurance plan. 

The Restoration Benefit is also known as a Perceived benefit and can be referred to as obtaining a double sum insured at a nominal premium.

Types of Restoration Benefit

There are mainly two types of Restoration Benefits available: -

  1. Complete Exhaustion of the Sum Insured – This restoration benefit will come into the picture only when the complete sum insured of your health insurance policy has been used up.
  2. Partial Exhaustion of the Sum Insured – The Partial Exhaustion of the Sum Insured Restoration Benefit would be applicable even when the sum insured of your health insurance policy has been partially exhausted.

When should you consider opting for the Restoration Benefit? 

It is advisable to purchase this add-on while you are planning to buy a Family Floater Health Insurance policy. The Restoration Benefit add-on will help in addition to tangible value to your health insurance plan. You would be able to avail the maximum benefits from your Family Floater plan if you opt for this add-on benefit.

For example, you have purchased a Family Floater health insurance policy which has a sum insured of INR 4 lakh. In case, your spouse is sick and the complete sum insured gets exhausted in her treatment.  However, if any other member of your family falls sick during the same policy year then by the Restoration Benefit your sum insured can be restored easily.

How does the add-on Restoration benefit work?

Let us understand the concept of the Health Insurance Restoration Benefit by an example.

Suppose, you have purchased a health insurance policy with a sum insured of INR 3 lakh. During the policy year, you have made several claims and your cover of INR 3 lakh has become exhausted. You have opted for the feature of Restoration Benefit and by the virtue of this feature, your insurance coverage would be restored to INR 3 lakh again during the policy tenure.

However, the entire process is not as easy as it seems to be. There are certain terms and conditions which are attached to the feature of the Restoration Benefit.

  1. Condition 1 – The Restoration benefit is functional for an unrelated medical condition

For instance, if you have a medical emergency due to a lung problem during which you were hospitalised. Your complete sum insured along with your NCB was used up during this time.  After a specific duration, you were being hospitalised again due to the same lungs problem. However, your restoration benefit would not be functional as it is the same medical condition that happened earlier. The add-on would be effective only if it would have been an unrelated ailment or illness. 

  1. Condition 2 -  The Restoration benefit would be triggered on the exhaust of the complete sum insured or the partial sum insured  

This would depend upon your health insurance plan as different health insurance plans have different terms and conditions related to the restoration benefit.

Suppose, your health insurance plan has a sum insured of INR 3 lakh. You have made the first claim during the policy year which was of INR 2.5 lakh. This amount was paid off from your cover amount as you had a sum insured of INR 3 lakh. Later on, you had another medical claim which was an unrelated illness of INR 1 lakh.

  • Complete Exhaustion – Your sum insured amount left was INR 50,000 and your second claim was for an unrelated ailment. However, the remaining amount of the second claim i.e. INR 50,000 would be paid out of your pocket as your sum insured was not completely exhausted. If there is another claim after this, then the Restoration benefit would be triggered.
  • Partial Exhaustion – In case your health plan has the feature of Restoration Benefit on the partial exhaust of the sum insured, then your restoration benefit would trigger the occurrence of the second claim.
  1. Condition 3 – The Restored benefit cannot be carried forward to the next policy term

If there has been a restoration of the sum insured of your health insurance policy then that is restricted to that particular year only. If the restored sum insured remains unutilised, then you cannot carry forward it to the next year.

  1. Condition 4 – Restoration will be functional in case of subsequent claims

This clause states that the restoration benefit does not get triggered for the first claim after the exhaust of the sum insured. The restoration benefit would be triggered after the subsequent claims. But, some insurance providers might change this clause in case of accidents. The restoration benefit can be triggered on the first claim itself in case of accidents.

How many times can the Restoration Benefit be offered?

 In most of the cases, Restoration Benefit would be offered only once during a policy year. This restoration can be up to 100% of the insurance policy’s sum insured. However, there are some health insurance plans which can offer the Restoration Benefit for an unlimited number of times in a policy year. However, this benefit would come with an additional price.

Points to remember

  • You must think wisely before opting for the Restoration Benefit option. You should not rely completely on the Restoration Benefit option for an increase in your sum insured. 
  • It is advisable to opt for a top-up or a super top-up plan than relying on the Restoration benefit completely. Top-up or super top-up plans would help you when you have a higher claim and your sum insured is falling short.
  • You must not ignore the basic features, benefits, and requirements related to health insurance policy while giving your entire focus on the Restoration Benefit.

Conclusion

So, the Restoration benefit is a good add-on benefit but it is most beneficial if you are having a family floater health insurance policy. You must think carefully, understand the terms and conditions properly, and then purchase this benefit.  

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