Health insurance is essential to financial planning, providing crucial support during medical emergencies. However, even with comprehensive coverage, medical expenses can sometimes exceed the sum insured. This is where the restoration benefit in health insurance becomes invaluable. This article will explore the restoration benefit in health insurance, its types and features, and how it can benefit policyholders. 

What is Restoration Benefit in Health Insurance?

Restoration benefit in health insurance is an add-on or built-in feature in some policies that reinstates the sum insured after it has been exhausted within the policy year. Suppose the medical expenses during a policy year exceed the initially insured amount. In that case, the restoration benefit will automatically replenish the sum insured, allowing for additional claims without purchasing extra coverage or a new policy. 

Types of Restoration Benefit

Broadly, restoration benefit comes in two types:

Partial Restoration

• If you use a part of your sum insured, the insurer may restore that portion. For instance, if you exhaust ₹3 lakh out of a ₹5 lakh cover, you may get that ₹3 lakh back under certain policies.

Full Restoration

• Here, the insurer restores the entire sum insured irrespective of how much has been used. So, whether you use ₹1 lakh or the whole ₹5 lakh, the full cover is reinstated.

Full restoration is more beneficial but usually comes with higher premiums.

How Does It Work?

Let's illustrate this with a detailed example: 

Scenario 

• Initial Sum Insured: Rs 5,00,000 

• Medical Expenses: Rs 5,00,000 (exhausting the initial sum insured) 

Once the initial sum insured is exhausted, the restoration benefit in the health insurance policy kicks in, restoring the sum insured back to Rs 5,00,000. This restored amount can be used for further medical expenses within the same policy year. 

Detailed Example 

Situation 1: Single Large Claim 

Claim 1: You have a medical emergency and incur expenses of Rs 5,00,000. 

• Your initial sum insured of Rs 5,00,000 is exhausted. 

• The restoration benefit restores the sum insured back to Rs 5,00,000. 

Claim 2: Later in the same policy year, you face another medical emergency and incur expenses of Rs 3,00,000. 

• The restored sum insured of Rs 5,00,000 covers this claim. 

• You still have Rs 2,00,000 available for any future claims within the same policy year. 

Situation 2: Multiple Smaller Claims 

Claim 1: You have a medical procedure costing Rs 2,00,000. 

• Your sum insured reduces to Rs 3,00,000. 

Claim 2: Another medical expense of Rs 3,00,000 arises. 

• Your sum insured is now exhausted. 

• The restoration benefit restores the sum insured back to Rs 5,00,000. 

Claim 3: Later, you incur another medical expense of Rs 4,00,000. 

• The restored sum insured covers this expense. 

• You still have Rs 1,00,000 available for future claims within the policy year. 

Benefits of Restoration Benefit

1. Enhanced Financial Protection:

   It provides an additional financial safety net, ensuring you are not uncovered during a policy year despite multiple claims. 

2. Peace of Mind:

   Knowing that your sum insured will be restored provides peace of mind, allowing you to focus on recovery rather than financial concerns. 

3. Cost-effective:

   Although policies with restoration benefits might come with a slightly higher premium, they are more cost-effective compared to buying a new policy or increasing the sum insured each time it's exhausted. 

4. Comprehensive Coverage for Families:

   In family floater plans, the restoration benefit ensures that all family members continue to have coverage even after the sum insured is exhausted by one or more members. 

Types of Restoration Benefit

There are primarily two types of restoration in medical insurance: 

• Complete Exhaustion Restoration:

  This type restores the entire sum insured only after it has been completely exhausted. For instance, if your sum insured is Rs 5,00,000 and you use up this amount, the restoration benefit will replenish it with another Rs 5,00,000 for future claims within the same policy year. 

• Partial Exhaustion Restoration in medical insurance:

  This type activates even when the sum insured is partially exhausted. For example, if you have a sum insured of Rs 5,00,000 and use Rs 4,00,000, the restoration benefit can replenish a portion of the sum insured, allowing you to continue making claims. 

Features of Restoration Benefits in Health Insurance

Non-Carry Forward Rule

Restoration benefit works only for the ongoing policy year. If you do not make use of it, the restored amount cannot be carried forward to the next year. It is a “use it or lose it” feature.

Future Claim Applicability

In most cases, the restored sum insured applies to future claims only. For example, if you are admitted to the hospital and your sum insured is exhausted during that treatment, the restoration benefit usually will not pay for the balance of the same admission. Instead, it kicks in if you have another hospitalisation later in the same year.

Multiple Claims Allowed

Some insurers allow you to use the restoration benefit more than once in a policy year, provided the sum insured is again exhausted. Others may restrict it to just one restoration per year. Always read the policy wording carefully.

Things to Consider While Opting for Restoration Benefits in Health Insurance

When considering the restoration benefit in health insurance, keep these points in mind: 

• Claim Process: Ensure that the claim process for the restoration benefit is straightforward and hassle-free. 

• Exclusions:

  Be aware of any exclusions, such as pre-existing conditions or specific treatments, that may not be covered. 

• Waiting Period:

  Check if there is a waiting period before the restoration benefit becomes active. 

• Frequency of Restoration in Medical Insurance:

  Determine how often the sum insured can be restored within a policy year. Most policies allow restoration only once a year. 

• No Carry Forward:

  Remember that the restored sum insured cannot be carried forward to the following policy year. 

How to Buy a Restoration Benefit Plan?

You can buy a restoration benefit plan as a standalone policy or as an add-on cover to your existing health insurance policy. When purchasing, consider the following: 

1. Premium Costs:

   Restoration benefits typically come with an additional premium. However, the extra cost is often justified by its additional coverage. 

2. Conditions:

   Understand the terms and conditions associated with the restoration benefit, including exclusions, waiting periods, and claim processes. 

Importance of Restoration in Health Insurance

The restoration benefit in health insurance is crucial for several reasons: 

Enhanced Financial Protection:

• Peace of Mind:

  Knowing you have a backup in case of high medical expenses gives you peace of mind. 

• Multiple Claims:

  It allows for multiple claims within the same policy year, which is especially beneficial for individuals with recurring medical issues. 

Benefits of Restoration Benefit for Policyholders

Opting for a health insurance plan with restoration benefits offers several advantages: 

• Increased Coverage:

  It increases the total coverage, providing better financial protection against high medical costs. 

• Cost-effective:

  Though it comes with a slightly higher premium, the restoration benefit is cost-effective in the long run as it saves you from purchasing another policy. 

• Family Floater Plans:

  In family floater plans, any family member can utilise the restored sum insured, offering comprehensive coverage for the entire family. 

Limitations and Considerations

Single Illness Restriction

A common clause is that the restoration benefit cannot be used for the same illness again. So, if you are hospitalised for a heart condition and exhaust your cover, the restored sum insured might not cover another heart-related hospitalisation in the same year. However, it would cover treatment for a different illness or accident.

High Premiums

While restoration benefit adds peace of mind, it often comes at a cost. Policies with unlimited or multiple restoration options tend to have higher premiums. It’s important to weigh the cost against your family’s health risks and medical history before opting in.

One-Time Restoration Only

Many policies allow restoration of the sum insured just once a year. If you exhaust the cover again after it has been restored, you may not receive another reinstatement until renewal. However, newer products are increasingly offering unlimited restoration, which gives more flexibility but at a higher price.

Conclusion

The abovementioned restoration benefit in health insurance highlights its importance and utility for policyholders. It ensures that you are financially protected even when medical expenses exceed your policy's sum insured. By understanding the restoration benefit of health insurance, meaning and its features, you can make an informed decision and choose a plan that best suits your needs. 

Enhance Your Coverage with Restoration Benefit at ManipalCigna Health Insurance

Don’t let high medical expenses catch you off guard. Opt for a health insurance plan with a restoration benefit to ensure your sum insured is replenished and you’re covered for additional claims within the same policy year. Visit ManipalCigna Health Insurance to learn more and find the perfect plan for your needs. Secure your health and peace of mind with ManipalCigna today.

FAQs on Restoration Benefit in Health Insurance

What is the restoration benefit in health insurance?

It is a feature that reinstates your health insurance sum insured after it has been fully or partially used up during a policy year, giving you continued protection for subsequent hospitalisations.

Is restoration benefit different from refill benefit?

Both terms are often used interchangeably. However, some insurers differentiate them. Restoration benefit generally applies after the sum insured is completely exhausted, while refill benefit may allow reinstatement even if only a part of the cover has been used. Always check your policy wording to see how your insurer defines it.

Does restoration benefit cover pre-existing diseases?

Yes, but only if your policy already covers the pre-existing disease after the applicable waiting period. Restoration benefit does not bypass exclusions or waiting periods. It simply gives you an additional sum insured once your base cover is used.

Is restoration benefit available in family floater plans?

Yes, in fact, it is particularly useful in floater plans. If one family member uses up the sum insured, restoration ensures that other members are still covered during the year.

What are the limitations of restoration benefit?

• It usually cannot be used for the same illness twice in a year.
• It may only apply to future claims, not the same hospitalisation.
• Many plans restrict it to a one-time use.
• It does not roll over into the next year.
• Premiums can be higher compared to plans without this feature.

Final Thoughts

Restoration benefit in health insurance is a powerful safety net, especially in today’s world of rising healthcare costs. For families, it means you don’t run out of coverage midway through the year. For individuals, it offers peace of mind that even multiple hospitalisations in one year won’t drain their financial resources.

However, the benefit comes with specific conditions. Before buying a plan with restoration benefit, understand whether it applies to the same illness, how many times it can be used, and whether the premium increase justifies the extra cover.

Choosing wisely ensures that your health insurance plan truly works when you need it most.