What you need to know before opting for a restoration benefit on your policy

Those buying health insurance for the first time or those who already have a policy, may not have checked to see if their insurance provider offers a ‘restoration benefit’ on the plan. This article discusses this benefit in detail.

First off, what is the ‘restoration benefit’?

In terms of health insurance plans in India, the ‘restoration benefit’ is a feature ingrained in the plan that reinstates the entire sum insured if the same is exhausted within the policy tenure.

Who can avail of it?

Everyone with a health insurance plan in India, whether individual or family floater, can avail of it if the policy provides the benefit. It is more useful for family health insurance plans where there is a possibility of multiple hospitalisations in one year among family members. If this happens, one family member may exhaust the entire sum insured, leaving the other participating policy members vulnerable to financial turmoil in case they need treatment and hospitalisation in the same year. The restoration benefit is shared by all participating family members and it can cover more than family member’s hospitalisation costs in one year.

Is it the same as a super top up plan?

The restoration benefit is not the same as a super top up plan. The former is a feature ingrained in the health insurance plan one buys, while the latter is a separate health plan. While the restoration benefit replenishes the exhausted sum assured, the super top up plan pays with additional coverage in case the entire sum insured of the primary health plan is exhausted. The super top up policy pays for multiple hospitalisations in one year, while the restoration benefit is useful for the policy tenure. (See more on how it works in the next section).

How does the restoration benefit work?

By now, you are aware that it replenishes the sum insured in full if the same is exhausted during the policy period. Let us understand how it works with this example:

• Suppose the sum insured on your family health insurance plan is Rs 7 lakh. Of this, Rs 5 lakh is used for a hip replacement surgery and related medical expenses for your aged parent.
• Now, if you or another family member faces an accident and requires both surgical intervention and hospitalisation costing Rs 4 lakh, you will have Rs 2 lakh left from your plan but you must pay the remaining Rs 2 lakh from your pocket.
• But if you have a restoration benefit in your policy, then you will receive the entire Rs 7 lakh as a restored amount once the sum insured on the plan is fully exhausted.
• There are two types of restoration benefits offered in health insurance plans in India. They are:

1. Complete restoration: As the name suggests, this benefit is offered only when the entire sum insured is exhausted, and not before. Thus, if there is some sum insured amount left in balance but there is a new requirement against it, you will have to pay the balance from your own pocket.
2. Partial restoration: As the term suggests, this benefit is triggered when the sum insured is partially exhausted in the health plan. The health insurance provider offers to restore fully or partially the sum insured if the same is partially used.

Before buying any health insurance plan in India, do go through the policy document carefully to know all its features and benefits, inclusions and exclusions, and whether it offers a restoration benefit or not.

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