How Restore Benefits In A Health Insurance Policy Works To Recharge Exhausted Sum Insured

In easy terms, the restore benefit in a health insurance policy works as a recharge of your sum insured, which the policyholder can use after making a claim. Some health insurers offer this benefit with their policy, thus allowing policyholders to use their sum insured in the first claim, after which it activates and restores the sum insured for continuing future claims in the same policy year.

This means that policyholders can still seek treatment and claim benefits with the same sum insured to be accumulated for the second time, which doesn’t happen in a standard policy. While some insurers allow this benefit after a claim-free year, only offer a 50 per cent restoration benefit.

Says Narendra Bharindwal, president, Insurance Brokers Association of India (IBAI): “Restore benefit is a feature that automatically reinstates the full sum insured if it gets exhausted due to previous claims in a policy year. It activates once the original sum insured (and any applicable bonus) is fully used up.”

Different Policies May Have Different Terms and Conditions 

According to Bhaskar Nerurkar, head, health administration team, Bajaj Allianz General Insurance, the restoration benefit is typically activated once the policyholder exhausts the sum insured for a particular illness.

“It usually applies to future claims and not the same disease or hospitalisation within the same policy year. However, some policies offer or allow restoration for the same illness, but it usually comes with a waiting period or some terms,” says Nerurkar.

In fact, some policies restore the full sum assured when it is exhausted for the same or different illnesses, while some have unlimited restoration features. This ensures that you have continued coverage even after your initial sum assured is used up. 

Read the Fine Print 

Reading the policy terms for specifics on waiting periods and other benefits is essential, as all such policies may come with different terms and conditions. If you have a restoration policy only for specific illnesses, but a waiting period for other illnesses, you should be aware of it. Also, you should be sure how and when restoration kicks in.

Says Nerurkar: “The restoration benefits do not increase total coverage. They act as a refill or recharge of the policyholder’s sum insured during the policy year. It is not a permanent increase in coverage; it is just a way to restore your initial coverage or sum insured only if it has been exhausted because of claims.”