What is a Restoration Benefit in Health Insurance?

The Buyt Desk

After the COVID-19 pandemic, almost every person has understood the significance of buying a health insurance policy. Having adequate health coverage is equally important. Given the increasing medical inflation, an insufficient sum insured could land you in a financial mess. To stay safe from this situation, restoration benefit assists a lot. It provides additional protection against unforeseen medical crises.

What is Restoration Benefit in Health Insurance?

Generally known as the refill benefit, the restoration benefit refers to the benefit wherein the insurance company restores the sum insured by a policyholder up to the maximum limit after it gets completely exhausted after a claim for any treatment.

This benefit is provided for individuals and their families under health insurance plans. You can use this benefit as your backup plan or an add-on cover to your current insurance plan. You’ll have to pay a higher premium for restoration benefits with your health insurance.

For example, an individual has purchased a health insurance plan of INR 5 lakhs with restoration benefits. The whole sum insured gets exhausted from his heart surgery. Now, after some months, he had to undergo cancer surgery costing about INR 4 lakhs. He doesn’t need to arrange funds from other sources as the entire expenses get covered in his health policy by restoring the original sum insured of INR 5 lakhs.

Types of Restoration Benefit

There are two major types of restoration benefits based on the level of exhaustion of the sum insured –

Partial exhaustion

This restoration benefit comes into force when the partial sum insured is exhausted. Go with this benefit only when it is proven highly beneficial.

Complete exhaustion

This restoration benefit comes into play when the whole sum insured is exhausted. This benefit comes with most health insurance policies.

Benefits of Restoration Benefits in Health Insurance

Purchasing a health insurance plan with a restoration benefit provides numerous advantages –

Get the complete amount of your sum insured reinstated as soon as the original sum insured expires.
It provides more financial efficiency than purchasing a health plan with twice the sum insured.
This benefit will cover you against several medical costs for different illnesses within the same year.
You would not need to worry about future medical expenses even when your original sum insured has already been exhausted. The required amount can be restored for any unexpected medical emergencies or needs in the future.

Who can Buy Health Insurance Policy with Restoration Benefits?

Older individuals who have more possibility to develop health conditions should opt for restoration benefits. People who are susceptible to some illnesses should also consider this benefit to get the treatment done without worrying about medical cover getting exhausted. Alongside them, people living in metropolitan cities or high-cost-of-living regions should opt for health insurance plans with restoration benefits.

Things to Consider When Buying a Health Insurance Plan with Restoration Benefit

You can buy the health insurance with restoration benefit as an add-on to your policy or health insurance premium while buying a new policy or renewing the pre-existing one. It will be available as a valuable add-on for individual and family floater plans. It means when any family member exhausts the base cover, other members can also take advantage of the cover.

Before opting for restoration benefits, consider the following points –

If you don’t use the restored sum insured in the year it was restored, it can’t be carried forward.
This benefit will be activated for unrelated medical issues.
You can opt for restoration benefits while purchasing an insurance policy with a nominal additional cost.
This benefit will not be applicable in your first insurance claim in a policy year. It will be available once the partial or complete sum insured is exhausted.
This benefit is meant just for future claims.
Only one family member can get the restoration benefit at a time.
Some policies might include the same health condition during a policy year while other policies allow the use of a restored sum insured by other family members for the same illness.