Last Updated : Oct 12, 2018 09:15 AM IST | Source:

Should one buy a health insurance plan with restoration benefit?

The restore option comes with certain health insurance plans. This option has some conditions attached.

Rakesh Goyal

Getting something extra excites all of us. It could be refilling our beverage in a restaurant for free or getting some complementary dish along with the ordered food. Such a similar feature can be seen in health insurance policy as well. This benefit is known as “restoration benefit” or also termed as “refill benefit”.

Knowing more about the restore option

The restore option comes with certain health insurance plans. Suppose, the customer’s Sum Insured (SI) is exhausted towards the treatment of a particular illness or injury, then the health insurer will restore the SI of the customer.

To understand better, we take an example, that suppose if you have procured a health insurance plan that has a SI of Rs.5 lakh. Meanwhile, you get diagnosed with a serious ailment and spend the entire Rs.5 lakh on its treatment within the first six to seven months. Later, you get diagnosed with some other lung issue after around 2-3 months; the insurer will restore the entire SI of Rs.5 lakh. Consequently, in this case, you will get an additional Rs.5 lakh during the policy year.

Hence, you will receive a cover of Rs.10 lakh by paying half the amount, if you procure this add-on benefit. However, with the majority of such add-on benefits, there is a catch that you will have to take into consideration.

Types of restoration options available

There are two different types of restoration options available. The first one is complete exhaustion of the insured sum which is offered as part of most health insurance policy. This benefit however comes into the picture only when the entire insured sum along with the bonus is exhausted.

In the above example, if your initial claim was for Rs.2.5 lakh and there is still a certain sum available, this benefit will not get triggered for the subsequent claim. On the other hand, the second one is Partial exhaustion of the insured sum which is more beneficial to customers and will come into force even with a partial exhaustion of the insured sum.

The ‘Restore’ option in health Insurance policy comes with its own set of pros and cons. It is up to the individual to read the fine print of their insurance document and avail this benefit based on their requirement.

Basic difference between restoration and recharge benefits

Policy seekers often get confused with the two significant yet different concepts of health insurance plans– restore benefits and recharge benefits. Both the benefits have distinct features.

In case of restore benefits, if your sum insured (SI) gets exhausted towards the treatment of any illness then the insurer will restore your SI and could be used for treatments other than the one for which the claim was already disbursed by the insurer. This restore benefit can be availed only once in a year and can be used only during the policy period it was brought in and cannot be carried forward to the subsequent policy period.

Suppose, you have a plan of Rs.5 lakh and you get hospitalized for typhoid and are undergoing treatment for the same which exhausts the SI of Rs.5 lakh completely. And if you have the restore benefit active under your policy, the insurer will reinstate the basic SI amount for that particular policy period. However, you cannot use this SI amount for any other treatment except Typhoid as the claim is already made for it. If the restored amount is exhausted, you will not be eligible for any restoration thereafter for that policy year.

While in recharge Benefit, it automatically reinstates up to 100% of the SI amount when the SI gets reduced owing to the former claim that has been paid out. This benefit is available immediately during the next hospitalization in a situation that the remainder of the basic SI fails to meet the cost of the treatment.

Here, if you have been hospitalized for Malaria and exhausted Rs.4 lakh against the SI amount of Rs. 5 lakh and if you are hospitalized again for some other ailment and incurred Rs. 2 lakh as hospitalization expenses, the insurer will automatically recharge the SI with Rs. 1 lakh to reimburse the second hospitalization expenses.

Now you know which add-on to opt for while you are purchasing health insurance plans.

The author is Director at Probus Insurance Broker
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First Published on Oct 12, 2018 09:15 am

tags #insurance

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