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Health Insurance – Restoration benefit: Know how it works



Health Insurance – Restoration benefit: Know how it works


With the increase in healthcare expenses, individuals have to look for a health insurance plan with catering benefits. In such a plan, if the sum insured is depleted during the policy year due to hospitalization of the insured, the insurer will replenish the sum insured with the accrued cumulative bonus. The reinstatement benefit in the policy will only be valid once for the entire insurance year and cannot be carried over to the following year.

The restoration benefit will make coverage expensive, unlike an add-on plan. In addition, the restoration benefit is generally not applicable for related claims. For example, if the solar insured is exhausted for heart disease, the restored sum insured cannot be used for another heart loss in the same insurance year.

Works well in the family float
In the case of a floating family plan, the reinstatement of the sum assured will be on a floating basis for all insureds. In fact, experts say that the restoration benefit works well in a floating family plan because the entire sum insured is shared by all family members. For example, a family has a floating plan of 5 lakh and the full amount is exhausted in processing two family members. If another family member is hospitalized, the restoration benefit will kick in and medical expenses will be covered up to the sum insured. Experts say that if a policyholder wants maximum coverage, they should ensure that the restoration benefit is added to their health insurance policy.

Also read: What happens in the transfer of a health insurance plan? all you need to know

Insurers offer two types of restoration benefits – complete exhaustion or partial exhaustion. In the first case, the benefit will only be applicable when the total sum insured has been exhausted. In the latter, it comes into play even after a partial exhaustion of the sum insured.

Points to check
Before deciding on the restoration benefit, check the conditions for restoring the sum insured for related and unrelated illnesses for the same coverage. See if it’s a supplement you can buy with the policy and if two or more family members with the same illness can apply for a restoration benefit.