All you need to know about restoration benefit in health insurance

After enduring a long and eventful period of COVID-19, it’s natural to ponder over the adequacy of your health insurance cover. Whether the plan can cover prolonged hospitalisation or will it fall short if more family members need it? Many policyholders second-guess their choice of plan, given the current times. Bring in the soaring medical inflation into the picture and the possibility of exhausting your sum insured in a single hospitalisation doesn’t seem so far-fetched after all. This is where the restoration benefit in health insurance comes to your rescue. It’s the simplest way to add an extra layer of protection for yourself and your loved ones against an expected medical crisis – or perhaps more.

The restoration benefit in health insurance is a feature that reinstates the total sum insured in case it gets exhausted any time within the policy period. This feature has found many takers amongst the people who opt for family floater plans. This especially works for these plans because the sum insured is shared by the whole family, and the benefit stands to cover more than one family member’s hospitalisation expenses.

The restoration benefit option is an in-built feature in almost every other extensive health insurance plan. Here’s all you need to know about it and how to make the best of it.

How Restoration Benefit Works

Simply put, restoration benefit restores the original sum insured amount if the policyholder uses it up any time during the policy period. For instance, you have a family floater plan of Rs 5 lakh, and have to undergo a sudden surgery that exhausts Rs 4 lakh. Now, if any of the other family members need hospitalisation that costs another Rs 2 lakh, the balance of Rs 1 lakh will have to be paid out of your pocket. However, if you have the restoration benefit feature in your policy, the original amount of Rs 5 lakh would be replenished as soon as the sum insured is exhausted in full.

Types of Restoration Benefits

There are two kinds of restoration benefits –

# Complete exhaustion – Here, the restoration benefits come into the picture only when the whole sum insured gets exhausted. If the entire sum is not exhausted, the benefit won’t get triggered and the policyholder would have to pay the balance amount out of pocket. Suppose, you have a cover of Rs 5 lakh and your heart surgery uses up Rs 4 lakh. Now, if you need Rs 2 lakh additionally for an unrelated claim in the same year, the restoration benefit won’t get triggered because your original sum insured is not completely exhausted.

# Partial exhaustion – Under this, the benefits can be availed even if some amount of sum insured gets used up. Some insurers offer to cover a second claim amount even if there’s some amount left from your sum insured. Take the above case here, and the restoration benefit will get triggered in case of partial exhaustion. So, your second claim will be covered as well even if you have Rs 1 lakh left out of your original sum insured.

Check with your insurer on the terms and conditions of both these types and opt for the one that best fits your needs. Also, your family history comes as an important deciding factor before choosing the restoration benefit.

What To Check Before Opting For It
Here’s your checklist before opting for restoration benefit in your health plan:

# The restoration benefit feature makes the premium costlier. Don’t forget to ask how this is going to affect your premium.

# The most important rule to remember is that restoration benefit gets triggered only for unrelated medical claims. Suppose you exhaust your sum insured over a heart surgery, then usually the restoration benefit will not cover a second heart-related claim in the same year. Understand from your insurer the type of claim they will cover and also the quantum of restoration benefit that will be covered. For instance, Aditya Birla Capital offers a restoration cover of 150% of the sum insured for a non-related illness for a cover of Rs 5 lakh. However, Max Bupa Health Insurance offers unlimited restoration of the sum insured for related as well as non-related illness for the same cover of Rs 5 lakh.

# Check with your insurer on the relevant conditions that apply for the same or different illnesses for different family members.

# The restoration sum insured usually cannot be carried forward to the next year even if you do not use it till its validity.

# Check if the benefit will trigger if the sum insured gets exhausted in a single claim or if it works in the case of multiple claims as well.

# Lastly, don’t just depend on restoration benefit for your protection. Rather, always opt for a higher sum insured to ensure your plan can take care of medical emergencies.

(By Amit Chhabra, Head-Health Insurance, Policybazaar.com)