Health insurance plans have become quite innovative in recent times as they are providing better and more inclusive coverage benefits. They are increasing the scope of coverage so that they can cover all possible types of medical expenses and the policyholders can enjoy complete coverage. One such coverage benefit, which is available in many health insurance plans, is the restoration of the sum insured. Let’s understand what this coverage benefit is all about –
What is the restore benefit in health insurance?
Restore benefit in health insurance is a coverage benefit which restores or refills the sum insured if it is exhausted on a previous claim. If in a policy year, you make a claim in your health insurance policy and use up the sum insured, the sum insured would be restored through the restore benefit so that in case of future claims the medical costs can be covered under the policy. For instance, if the policy has a sum insured of INR 5 lakhs and the coverage is used upon a claim, if there is another claim within the same policy year, the restoration benefit would restore the sum insured back to INR 5 lakhs. Thereafter, the restored sum insured can be used to meet subsequent claims which occur within the same policy year.
What are the types of restore benefit in health insurance?
Restore benefits in health insurance can come in two types. They are as follows –
- Restoration on complete exhaustion of sum insured
If the health insurance policy provides a restore benefit in case of complete exhaustion of the sum insured, the restore benefit would work only if the sum insured is exhausted. If it is not, the restore benefit would not be applicable. For instance, say a health plan has a sum insured of INR 5 lakhs and a claim of INR 4 lakhs is made. After the claim is paid, the remaining sum insured is INR 1 lakh. If there is any further claim of INR 2 lakhs within the policy year, the restore benefit would not be applicable. INR 1 lakh would be paid by the remaining sum insured and the remaining INR 1 lakh would have to be paid by the policyholder.
- Restoration on partial exhaustion of sum insured
In a health insurance policy providing restore benefit on partial exhaustion of sum insured, there would be no need for the sum insured to be fully exhausted for the restore benefit to apply. The sum insured would be restored for future claims. For instance, in the above example, after the claim of INR 4 lakhs, INR 1 lakh sum insured would be left. The restore benefit would apply and the sum insured would be restored to INR 5 lakhs. For the future claim of INR 2 lakhs, the sum insured would be available to pay off the claim.
Benefits of restore benefit in sum insured
The restore benefit in health insurance is quite beneficial as it provides additional coverage. Here are some of the benefits of restore benefit –
- Restore benefit increases the coverage available in your health insurance policy. You can enjoy additional sum insured under the policy through restore benefit
- Many health insurance plans have an inbuilt restore benefit under the policy’s coverage benefits. Therefore, you are not required to pay an additional premium for availing the coverage
- The restore benefit ensures that your health insurance policy would not fall short in meeting your health insurance claims
- If you have a family floater health plan, the restore benefit is very beneficial. In such policies, the restore benefit ensures that the sum insured sufficiently covers all the members of your family. If the sum insured is used up by one member, the restored sum insured would ensure that the plan covers the medical expenses of another member if required.
Who should opt to restore benefit in health insurance?
Restore benefit is universally beneficial for all health insurance policyholders. It becomes especially relevant when you are buying a family floater policy to ensure optimal coverage for all members of the family. You can even opt for this coverage in case of individual health insurance plans for higher coverage. Moreover, if you have an existing illness and/or you are prone to illnesses and/or accidents, you should opt for the restore benefit so that in case of frequent claims, your sum insured would not fall short in covering your medical expenses.
Things to keep in mind about restore benefit in health insurance
Here are some important aspects of the sum insured restoration benefit which you should keep in mind if you are opting for this coverage benefit in your health insurance plan –
Under many health insurance plans, sum insured restoration features are inbuilt in the scope of coverage. It forms a part of the coverage benefits of the policy and you don’t have to opt for the coverage separately. However, under some health insurance plans, restoration benefit is available as an optional add-on. You are required to opt for this benefit by paying an additional coverage. So, when buying health insurance check out whether the restore benefit is inbuilt or optional.
Health insurance plans which have the restore benefit in their coverage features would cost more than plans which don’t. So, if you are buying a health plan with restore benefit, the premiums would be higher compared to a plan without restore benefit. The actual cost of the benefit depends on the insurance company and it is not very high.
- Extent of restoration
This is another important condition which you should check if your health plan has restored benefit. Under many plans, the restore benefit restores 100% of the base sum insured. Under some plans, however, restoration is allowed for up to 50% of the sum insured only. Additionally, there are plans which allow the sum insured to be restored by 200% through the accelerated restoration feature which is available as an add-on. For instance, if the sum insured is INR 5 lakhs and the restore benefit restores 100% of the sum insured, the sum insured would be restored by INR 5 lakhs upon exhaustion. In the case of 50% restore benefit, the restoration would be by INR 2.5 lakhs and in the case of 200%, the restoration would be by INR 10 lakhs. So, while the first plan would give you total coverage of INR 10 lakhs, the second one would give coverage of INR 7.5 lakhs and the third one INR 15 lakhs.
- Application of restoration
There are some terms and conditions based on which the restore benefit applies. These include the following –
- The restore benefit is not applicable to the first claim in a policy year. It becomes applicable to claims subsequent to the first claim. So, if you have a health plan of INR 5 lakhs and your first claim is INR 5.5 lakhs, the restore benefit would not give you an additional sum insured. In that case, you would have to pay INR 50,000 from your pockets. Thereafter, for any subsequent claim, the restore benefit would restore the sum insured and you would get a cover of INR 5 lakhs
- Under many plans, the restore benefit might work only once in a policy year. Once it is used, it becomes invalid even if there are multiple claims thereafter. However, in some plans, the restore benefit can work a multiple number of times within the same policy year.
- The restore benefit is allowed on unrelated illnesses. This means that the subsequent claim in the policy should be for a different illness or injury than the first wherein the sum insured was used up. If the subsequent claim is for the same illness or injury, the restore benefit might not apply.
- Carry forward of the benefit
If you do not use the restore benefit feature of your health insurance plan, it cannot be carried forward to the next policy year.
The sum insured restoration benefit has become a common coverage feature of many new-age health insurance policies. It proves beneficial as it allows sufficient coverage in case of multiple claims. So, look for health plans with the restoration benefit feature for optimal coverage.
Frequently Asked Questions
- What is the coverage duration of restore benefit?
The restore benefit has the same coverage duration as that of the main policy. If the benefit is inbuilt in the coverage features, it would continue every year that the policy is renewed. If, however, you have opted for the benefit as an add-on, you would have to opt for the add-on every time the policy is renewed to enjoy continued coverage lifelong.
- In a family floater health plan, one member makes a claim for heart attack and exhausts the sum insured. Would the restore benefit work if another member suffers a heart attack and makes a claim?
The restore benefit works on subsequent claims and not on the first claim. Thus, if one member has made a first claim under the policy, the second member can make a subsequent claim under the policy and the restore benefit would work. Even if the claim is made for the same illness, the restore benefit would work provided that the second member makes a claim after the first claim has been made and settled.
- My existing policy does not offer restore benefit. How can I avail coverage for restore benefit?
You can buy an additional health insurance policy with restore benefit to get coverage for restore benefit if your existing plan does not offer such coverage. Alternatively, you can switch your current health insurance policy to another health insurance policy which offers coverage for restore benefit. This switching is called porting and this is available at the time of renewals.
- Is the no claim bonus taken into consideration when restore benefit is applied?
Yes, the no claim bonus is taken into consideration when restore benefit is applied. The restore benefit is applicable when the sum insured and the no claim bonus thereon is used upon a previous claim.
- I suffer an accident and use up the sum insured in the first instance of a claim. Thereafter, I am hospitalised for an appendectomy. Would the restore benefit apply?
Yes, the restore benefit would apply since the subsequent claim is for an unrelated illness. Your sum insured would be restored and the health insurance policy would cover the cost of appendectomy.