Restoration of Sum Insured in a Health Insurance Policy

After purchasing a health insurance policy one is rest assured that any emergency or serious health condition can be handled without creating a dent on one’s financial position. However a sudden serious hospitalization can require specialized treatment and can be expensive. In such a scenario the sum insured in the health insurance policy might get fully exhausted and there is no more sum insured available for the next claim in a policy year. Further if the health policy is a family floater then the other members of the family remain uninsured. Restoration of sum insured to its original amount is the ideal solution in such cases.

Luckily health insurance policies provide for such restoration of sum insured. Restoration benefit is an add-on feature in health insurance policies that offers an additional sum insured after the original sum insured is fully exhausted in a policy year.

This benefit is alternatively known as the refill benefit. It can be useful in case there is a need of a second hospitalization within the single policy year.

Let us examine the restoration benefit in health insurance policies in more detail.

Restoration benefit in health insurance policies

Sum insured is the maximum amount payable in a health insurance policy. Sum insured takes care of the hospitalization expenses along with the doctor’s fee, room rent, medical procedures etc. Restoration benefit restores the sum insured of the health insurance policy, to its original limit after it gets exhausted following a claim. This benefit is available for individual and group policies. This benefit is useful when there is a second hospitalization within a single policy year.

Restoration benefit is the best choice for a floater policy where all members of a family are covered and a single sum insured is floating between all the family members.

Type of restoration benefit in health insurance

There are two types of restoration benefits that are based on the amount of exhaustion of sum insured:

Complete Exhaustion: This kind of restoration benefit kicks in once the whole amount insured has been depleted. A restoration benefit is typically provided for the full depletion of the sum insured under most health insurance policies.
For instance, if a Rs. 4 lakh claim is filed under a Rs. 5 lakh amount insured health plan, you will receive the remaining insured amount of Rs. 1 lakh upon claim payment. But the restoration benefit will not be available in the event of a second claim filed during the same insurance year. In case your remaining sum insured is exhausted, only then the restoration benefit is activated.

 

Partial Exhaustion: In the event that only a portion of the sum covered is exhausted, the restoration benefit is still applicable. This kind of restoration benefit is the better option when it comes to benefits.
For instance, if you make a claim of Rs 4 lakh against your total sum insured of Rs.5 lakh, you will be left with Rs. 1 lakh. However, the restoration benefit would come into effect and the insured amount would be raised to Rs 5 lakh, ready for any additional claims in the future.

Special features of restoration benefit in a health insurance policy

·        Restoration benefit applies to every sum insured.

·        Restored sum insured cannot be carried forward to the next policy year, even if it is not used in the policy year when it was restored.

Advantages of restoration of sum insured in health insurance

·        Additional sum insured is available under the policy within the same policy year.

·        Extra coverage with the original premium paid amount.

·        Helps you stay prepared for any medical emergencies without the fear of facing shortage of funds for paying any medical claim.

·        Health insurance plans with in-built restoration benefits help you get extra coverage with the original premium paid amount.

·        This ensures that there is no need to buy additional health policies thereby offering ease in monitoring of insurance renewal.

·        Higher sum insured ensures adequate protection especially for non-controllable events like accidents, pandemic situation, etc.  

 

This benefit is most suitable for families where members have recurring illnesses and are always in need of medical assistance. Under the health insurance policy the sum insured may be completely exhausted and further claims will not be admissible. In such a situation one will be left without coverage for another claim until the health policy expires. Restoration of the basic sum insuredis an added advantage and can salvage the expenses of an unexpected health ailment.

Restoration benefit in health insurance is applicable under certain terms and conditions. They can vary based on the type of restoration offered. So, before purchasing a health insurance plan with restoration benefits, do consult an insurance broker .Understanding policy terms and conditions is significant to avail benefits under the policy and for optimum coverage.

We at Zen insurance assist in choosing the right Insurance cover to suit your needs. Please contact us for assistance.

 

 Disclaimer:   

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products.