Evolution of restoration benefit in your health Insurance

Since the pandemic's emergence in 2020, the significance of health insurance has grown exponentially. Further, with the new COVID variant Omicron and its ever increasing cases in the past two months, people have not only realized the importance of health insurance, but also the importance of having appropriate coverage in their plan. However, there are several benefits that people are unaware of which can certainly help them maximize their coverage in these unprecedented times where multiple hospitalizations are happening.   

One such lesser known feature is the ‘Restoration Benefit.” Under the restoration benefit, if you use up your existing coverage during a policy year, the restoration benefit provides you with replenished coverage. Almost every comprehensive medical plan includes this as a standard feature. This benefit, which comes at an added charge, is particularly popular among people who choose family floater plans because it provides coverage for several hospitalization. 

How does this feature work?  

  After your initial sum insured is totally or substantially depleted in the same policy year, the restoration benefit retinstates the entire sum insured. For instance, suppose Mr. Sharma purchases a Rs 7 lakh family floater plan for his family of four. Suddenly, he has to go for an open-heart surgery, which costs him his entire insurance policy.  Unfortunately, after two months, his daughter is admitted to the hospital for another illness, resulting in a medical bill of Rs 5 lakhs. At this point diving into their savings won’t be a good idea. Thus, the restorative benefit kicks in at this point. When Mr. Sharma’s cover expires, it automatically reinstates the full amount of the sum insured. As a result, the restored benefit acts as an amazing backup, replenishing the policyholders' whole sum covered and keeping them financially secure. 

There are two types of restoration options- complete and partial, these are classified based on how much of the sum insured has been consumed. Upon complete utilization when the whole sum insured is depleted, the benefit kicks in. On the other hand, some organizations provide restoration benefits if only a portion of the insured amount is consumed. Even if the sum insured is partially depleted, the benefit kicks in. 

How Restoration benefit has adapted to growing health Insurance needs 

1. One time restoration- Earlier, when the restoration feature was launched in policies, a one-time restoration option was available for the policyholder. This means, after depleting the sum assured during the insurance period, the policyholder could claim for one additional hospitalization under the restoration benefit. However, the restriction was that the second hospitalization should not be for the same illness. For instance, If you use the coverage amount for a specific ailment, such as a cardiac arrest, you will not be able to utilize the restored sum insured for the same condition again throughout the policy term.

2.  Unlimited restoration for different members- The benefit was then expanded to include further protection. During the policy year, the sum insured could be renewed an unlimited number of times. However, different members needed to be hospitalized in order to access the restoration benefit. 

3. Unlimited restoration for the same person but different illness- Post this, unlimited restoration for the same individual with the same disease was being offered. 

4. Unlimited restoration for the same illness, for the same person- Now, with the possibility of further COVID waves circulating, and rising illnesses, insurance companies are offering unlimited restoration for the same person with the different or same illness.  Some of the insurers who are offering this benefit are Niva Bupa’s ReAssure Plan, Care’s CareClassic plan and Digit Insurance as well. These plans offer the ultimate protection that anyone can have to stay protected at all times. 

Terms and Conditions 

1.  Works on a tenure basis- The restored benefit can only be used once each policy year, and unlike the no-claim bonus, it cannot be carried over to the following policy year, even if it was not used in the year of restoration.

2. This Feature is not available for the first claim- This means only future claims are eligible for the restoration benefit. As a result, this benefit cannot be used on the first claim of the policy year. For instance, if your hospitalization bill comes to Rs 10 lakhs and your current health insurance is Rs 7 lakhs, because this is your first claim, you will only be reimbursed for your health insurance and the difference will be at your expense. If you file another claim during the same policy year, only in that case, your sum-insured will be reinstated.