As Covid-19 graduates into its third wave, a newfound awareness regarding the vitality of health insurance is seeping among Indians. Figures collected by Financial Express in March 2021 alone indicate that there has been an unusual rise of 41% in the health insurance industry. But this perpetual rise in demand for high sum insured health insurance plans in India is no new story. Interestingly, more people from between the age bracket of 30-40 years have started opting for health insurance plans up to INR 1 CR. However, along with the rising demand for high sum insured, another feature has found its way to immense popularity. This feature is called Restoration Benefit, a coverage enhancing facet widely available across several health insurance plans in India.
Restoration benefit is also known as Recharge Benefit or the Sum Insured Restoration. With this benefit, you get additional coverage on exhaustion of the sum insured. As the name suggests, a Restoration benefit is a coverage benefit that is restored, or refilled, once the original cover is exhausted.
To explain with an example, say you own a health plan worth INR 10 lakhs and exceed this set budget by spending INR 11 lakhs during hospitalization. Despite this, a cover of INR 10 lakhs would still be available in the policy next year. However, if you want to claim again for an amount in the same policy year, your health plan would not pay any further. It is because you have exhausted the entire limit (INR 10 lakhs) in the respective policy year.
But, if you have Restoration Benefit, this is when it comes in handy and refills the cover for you to claim again. With the Restoration Benefit, once the entire sum insured is over, the insurer automatically replenishes the coverage for the policyholder to claim anew in the same policy year. The restoration happens automatically and acts as a Stepney in a health insurance plan. As a cascading effect, this reduces or eliminates out-of-pocket expenses.
Although restoration benefits are pretty straightforward, there is often an attached fine print to it. Basically, this fine print states the terms and conditions for the applicability of the restoration benefit. Here are some general terms and conditions, often attached as fine prints-
Most health insurance plans offering restoration benefits allow the subsequent claim only for an unrelated illness. It implies that the second claim cannot be related to the first claim in any way. For example, if a policyholder uses the sum insured on cardiovascular treatment, they cannot make a subsequent claim related to cardiovascular ailments.
Mostly, the restoration feature is available if the sum insured is used up entirely. The restore feature would not apply on the second claim if the sum insured is remaining. For example, if you have a sum insured of INR 10 lakhs and your first claim amounts to INR 7 lakhs, the restore benefit would not apply to the second claim. Here, if your second claim is INR 4 lakhs, INR 1 lakh would be your out-of-pocket expenses.
Usually, restoration of 100% of the sum insured is allowed. However, some plans may restrict this percentage and fluctuate. Additionally, some insurance plans may allow you to enhance the restoration amount through an add-on.
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