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Restoration in Health Insurance Explained

Picture this…you’ve exhausted your entire salary in the middle of the month, and suddenly at one point in time, your entire salary is restored and given back to you. What a happy feeling that would be, right? Restoration benefit will give you this happy feeling if you’ve opted for it in your respective health insurance policy. Sounds too good to be true, right? You will agree with us, after understanding its pros and cons.

What is Restoration Benefit?

Restoration benefit is a benefit wherein the insurance company restores the original sum insured after it gets fully exhausted for the treatment of the illnesses. So, even if you consume the entire sum insured, you need not worry as if you have this benefit your insurance company can restore the entire amount and you can use it in the future.

Let’s understand this with an example - Mr. Ravi has a health insurance policy of Rs 4 lakhs with restoration benefit. He had to undergo a heart surgery and the entire sum insured of Rs 4 lakh gets exhausted. A few months later, Mr. Ravi is diagnosed with Cancer which required surgery costing around Rs 2 lakhs. The Insurer will cover the cost of Surgery, hospitalization and medical treatment of Mr. Ravi as it has restored the original sum insured of Rs 4 lakhs and this was possible only because Mr. Ravi opted for Restoration Benefit while purchasing his health insurance policy.

We don’t believe in wooing our customers with fancy benefits, we give you the real ones like Restoration Benefit which can actually help you in the long run.

Why is it Important - This is important and beneficial because when you choose this, you make a wise decision. Having a back-up plan is always essential in any case, especially when it comes to your health. Likewise, a restoration benefit is your back-up plan and will help you when the need arises.

Types of Restoration Benefit

There are two types of restoration options available and we suggest you must read the fine print of your health insurance policy before opting for either one of them:

Complete exhaustion of the Sum Insured – In this option, the benefit will come into play only when the entire sum insured is exhausted.
Partial exhaustion of the Sum Insured - In this option, the benefit will come into force even with partial exhaustion of the sum insured.

Who should opt for a Restoration Benefit?

We advise you to buy this add-on benefit while purchasing a family floater policy to enjoy maximum benefits of your policy. This benefit will suit your Family Floater plan as it adds tangible value to your plan. For those who are less aware, the cover 'floats' between family members in family floater plans. In such policies, the restoration benefit feature comes in handy.

For instance, you have a floater plan with a Sum Insured of Rs. 4 lakhs, and your spouse falls ill, and the entire coverage is consumed. If, unfortunately, another one of your family members get hospitalized later in the same policy year, this feature would help you in this situation by restoring your Sum Insured.

Does Restoration Benefit increase the policy premium?

The restoration benefit is also economically beneficial. However, one of the thumb rules of determining the premium of an insurance cover is this – the more features that have been opted with the policy, the higher is its premium. This benefit certainly stretches the premium amount. This is an extra cost that an insured person bears for the additional cover. For instance, a Rs 4 lakhs insurance plan would cost a 34-year-old a little more than Rs 5,000 annually, while for a plan with restoration benefit the cost would be more than Rs 6,000.

Keep these points in mind when opting for Restoration Benefit:

Restoration benefit will trigger for an unrelated medical condition
It is an ‘Add-on’ benefit which you can buy with your insurance policy
It can be taken while buying a policy with nominal extra cost
Restoration will happen on exhaustion of complete sum insured or partial sum insured
Restored sum insured is not liable to be carried forward to the next policy year
Restoration benefit will not apply in the first claim
It is not applied only to the higher sum insured, can be applied to any given sum insured
Restore benefit reinstates the total sum insured once you exhaust it in a single claim within the policy term
Restore Benefits are only for future claims.

FAQs about Restoration Benefit in Health Insurance

Is Restore benefit applicable to the same illness?

Few companies offer to restore benefit for the same illness with a gap of 30 to 45 days with an extra price.

Otherwise, the industry practice is - restoration benefit in health insurance can only be availed if there is hospitalization for unrelated diseases. For instance, you had to hospitalized for a fracture and claimed your health insurance. Unfortunately, in the coming months, you get affected by swine flu. Your restore benefit will be activated for your health insurance claim as the hospitalization done are not for the same illness.

Can you avail restoration benefit in health insurance in the same claim?

Restore Benefits are mostly for future claims. So, it cannot be availed on the same claim. For instance, if you a health insurance policy of 5 Lakhs, but your hospitalization expenses come to 8 Lakhs, the extra 3 lakhs you will have to pay from your pocket. But if you need to be hospitalized again in the coming days, then your Sum Insured will be restored to 5 lakhs again, although you had already used up the entire limit in the last claim. However, there are some health plans where if the claim exceeds the Sum Insured that will trigger the restore benefit automatically.

Do you need to exhaust the entire sum insured in one claim to avail restore benefit?

For most health insurers, the total sum insured is restored only if the entire sum insured is exhausted under a single claim. But there are also some health insurers who offer restore benefit as soon as there is any hospitalization required. There are also some plans which can be restored unlimited times in the policy year So, it is always advisable to check with your health insurer before opting for this benefit.

What happens in case of an accident with a family floater policy?

In case of accidents, some health plans ensure that the insured members have an unlimited coverage. Say someone has a family floater policy with a limit of 5 lakhs as Sum Insured. Unfortunately, in an accident, 3 members of the family get injured. The Restore benefit will kick in here, where each of the injured family members covered under the policy will get 5 Lakhs as the Sum Insured, so effectively the Sum Insured will get raised to 15 lakhs from 5 lakhs.

Can 2 members of the family suffering with the same disease claim for restore benefit?

Restoration benefit can be claimed for only future claims, so only one person at the time can avail it. The trigger point for disease must be at different time intervals. However, in some special cases restoration will work for different person in the family floater plan. Eg, due to accident, if there is multiple member injuries and hospitalization, claims for different members can be trigger for restore benefit.