What Is It About Restoration Benefit Offered by Health Insurance Companies?


Health insurance in 2021 is not a luxury anymore, instead a must-have financial backup for medical contingencies. The world is learning to copy around the pandemic and health insurance plans serve as a safety net that must be planned for.

In addition, the medical inflation rate is hovering around the 8% mark as reported by Businessline, a health insurance cover purchased a couple of years back may be insufficient. Many policyholders at such times may choose to opt for a fresh health plan. But waiting period is a significant downside to buying a new policy just when you need it the most. That’s when you must consider the restoration benefits offered by medical insurance policies. This article talks about these restoration benefits that must be carefully checked when buying health covers.

What is a restoration benefit in medical insurance plans?

Restoration benefit for health insurance plans restore the sum insured of the policy to its original amount for treating subsequent ailments. A common feature of family floater health insurance plans, it helps to tackle more than one hospitalisation in a time when the original sum insured of the policy falls short to cover the medical expenses. With this feature, you need not buy additional health insurance plans for covering the medical treatment cost. Some insurance companies offer restoration features as an add-on while some offer it as a bundled service.

The restoration benefit comes handy in case of repeated hospitalisations. Owing to soaring treatment cost, a second hospitalisation during a single policy year may exhaust the coverage leaving you in a financial stress. * Standard T&C Apply

For whom is the restoration advisable?

The restoration benefit is advisable if you are seeking to enhance your policy’s coverage considering the growing medical inflation rates. This feature is especially useful with a family floater policy as more than one beneficiary is covered by the plan. This way, if you have a sum assured that fall short today as per your estimation of treatment cost, you can take advantage of such feature in your health insurance policy.

What are the different types of restoration benefits?

Based on the level of exhaustion of the policy coverage, the restoration benefit can either be a complete or partial exhaustion.

Complete exhaustion is where the insurance company reinstates the amount only when the entire sum assured gets exhausted. When all of your base sum assured is exhausted, only then such restoration feature kicks in. The other type of restoration is partial exhaustion where even if a part of the coverage is used, the insurance company reinstates the original sum assured. This way, all future claims will be settled without having to worry about the insurance coverage being inadequate. * Standard T&C Apply

What are the pointers you must know when buying a plan with restoration benefit?

For the different types of health insurance plans, here are some pointers to keep in mind:

  • No carry forward of the restoration benefit is allowed if not used during the current tenure.
  • For complete exhaustion plans, the sum assured is reinstated only when you exhaust the entire base coverage in a single claim. Similarly, partial exhaustion plans reinstate the sum assured as you use up the coverage.
  • Reinstatement benefit can be availed for all types of health insurance policies and not only for higher sum assured plans.
  • Reinstatement benefit kicks in only subsequent claims and not the first policy claim.
  • Such feature is recommended to include in a family floater policy where the coverage ‘floats’ among multiple beneficiaries.
  • The restoration benefit can be availed only by one beneficiary at once.

* Standard T&C Apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

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