How to use Restoration Benefits in Health Insurance?
Health insurance policies were unknown things for many people in India. People believed purchasing a health insurance policy is wasting a chunk of money. But this COVID-19 pandemic has increased the demand and awareness of various health insurance plans in India. The health insurance industry experienced a phenomenal rise of 41% only in March 2021 during the 2nd wave of the COVID-19. As a result, many people opt for higher insured plans like Rs 1 Crore to protect their health against various ailments, including the lethal COVID-19.
Along with the popularity of high sum insured, several other features like restoration of benefits or sum insured restoration are also getting popular in India. If you have already surpassed the sum insured, then restoration benefit in health insurance offers you additional coverage.
What is the Restoration benefit of Health Insurance?
Restoration of cover benefit is a type of benefit where your insurer reinstates the original sum insured once you entirely use the amount for the treatment of diseases. With this benefit, even if you have consumed your entire sum insured, you don’t need to worry about your expenses because your insurance company will restore the entire amount you may use later.
Let’s discuss it with an example
Mr. Robin (57-years-old) purchased a health insurance policy of Rs 4 lakh with restoration benefits. However, he was diagnosed with a heart problem and had to undergo heart surgery. His entire sum insured of Rs 4 lakh gets exhausted with this surgery.
After a few months, Mr. Robin was again diagnosed with some kidney problems that required surgery costing around Rs 2 lakh. The insurance company will reimburse the cost of surgery, hospitalization, and other treatment procedures of Mr. Robin as it has reinstated the original sum insured of Rs 4 lakh. Since Robin opted for a restoration health insurance policy, hence the insurer restored the sum insured.
Restoration benefit is imperative. It works as a backup for your health insurance plans if your coverage is exhausted. This lessens or minimizes your out-of-pocket expenses in the case of any hospitalization.
There are a few rules in using restoration benefits. Because the restoration process happens automatically, the insurer will automatically restore the sum insured for your future use if your plan comes with a restoration benefit and the sum insured is exhausted.
Points to keep in mind about Restoration Benefit
- You are eligible for restoration benefit once your entire coverage is drained
- The restoration benefit is not available in the initial claim.
- Once your coverage is utterly exhausted after the initial claim, you are eligible for restoration benefit for subsequent unrelated claims in the same policy year
- You are unable to carry forward any unutilized restoration benefit to the next year
- Many plans come with in-built restoration benefit
- Most health insurance plans allow restoration once during the policy year. However, some plans allow unlimited restorations.
Terms and conditions associated with the Restoration Benefit
Applicable for unrelated illnesses
Most health insurance policies offer restoration benefits if the subsequent claim is for an unrelated illness. This means your following claim should be different from the first claim. If both claims are for the same disease, then the restoration feature won’t work.
For example, a policyholder used his/her entire sum insured on angioplasty. If the policyholder needs to make a subsequent claim, it should not be related to the angioplasty or its complication. If you want your restoration benefit to working properly, your subsequent claim should be for an unrelated disease. But some plans even permit restoration features for related claims. Thus, you should check your policy’s terms and conditions before making any final commitment.
Complete exhaustion of the sum insured.
Most health insurance plans offer restoration if you utilize the entire sum insured amount. However, if there is any residual sum insured, the restoration feature is not applicable for the second claim.
If you purchased a sum insured of Rs. 10 lakh and, on the first claim, you have used Rs 7 lakh. Since Rs, 3 lakh is remaining, and that’s why restoration benefit won’t be applicable for the second claim. If the second claim is Rs 4 lakh, then you need to pay Rs 1 lakh from your pocket. If you need to make a third claim, then you are eligible for restoration benefit.
Most health insurance plans restore 100% of the sum insured amount. Some may offer up to 50%, while others even allow up to 200% restoration. In addition, with some health insurance plans, by choosing add-ons, you can increase the restoration amount.
Types of Restoration Benefit
- Complete exhaustion of the sum insured: In this type, you will get restoration benefits once your entire sum insured is exhausted.
- Partial exhaustion of the sum insured: Here, you will get restoration benefits even with partial depletion of the sum insured.
Does Restoration Benefit enhance the policy premium?
The restoration benefit is quite budget-friendly and will never burn your pocket. But the benefit will certainly enhance your premium amount marginally, and an insurer will pay this extra cost to avail of the additional cover.
For example, a 34-year person needs to pay Rs. 5000 annually for an insurance plan of Rs. 4 lakh. But for a plan with restoration benefits, he/she needs to pay Rs 6,000 annually.
Advantages of having a Restoration Plan
- With this benefit, you can get an additional sum insured amount for your policy
- If you have a restoration benefit, you don’t need to worry about finances under any healthcare emergency
- Restoration benefits in the family floater plan will cover all your family members with adequate sum insured
This article gave you an idea about what is a restoration of cover in health insurance and how it works. You can compare all health insurance plans on iiflinsurance.com and choose the most suitable one for your requirements.