With the cost of medical procedures going through the roof, adequate health insurance is necessary. One way of getting a high sum assured for a reasonably lower premium is to go for a policy with restoration benefits.
How Health Policies With Restoration Benefit Work
The restoration benefit is a feature in health insurance that automatically refills or restores the sum insured once it is fully or partially exhausted due to a claim. It acts as a backup pool of funds during the same policy year, ensuring continued coverage for subsequent hospitalisations without requiring a new policy.
“This benefit is triggered when the base sum insured is depleted, either entirely or to a defined threshold, depending on the insurer’s terms. It kicks in for the next or the same hospitalisation(s), depending on the policy T&C, helping policyholders manage multiple medical events within the same year without additional financial stress,” says Siddharth Singhal, head, health insurance, Policybazaar.
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In other words, the restoration benefit works like a health insurance top-up - it is a value-added option that comes into effect when you use your base sum insured. “For example, you may have a Rs 5 lakh cover, you have surgery and use it all. If your policy is restored, the insurer will restore the Rs 5 lakh for further claims you make in the same year (usually at no extra cost). This can be an invaluable safety net if you have multiple issues that require treatment in conjunction,” says Kunal Varma, founder and CEO, Freo.
Read The Fine Print And The Conditions
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However, some plans let you use the restored sum for a different illness or for another insured family member, which can be helpful in multi-member policies. Others may allow you to use it for the same illness and the same person, but only once the original sum insured has been completely used up.
First, there’s the trigger clause. In most cases, the restoration benefit kicks in only after the original sum insured has been fully used up, though some plans may allow it to activate partially. Another thing to note is how the restored amount can be used. “Many policies don’t allow the restored sum to be used for the same person and the same illness within the same policy year. Also, not all plans offer the same frequency.
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Some will only restore the coverage once a year, while others may allow multiple or even unlimited restorations, depending on the insurer,” says Singhal.
“Additionally, restoration is mostly not valid for OPD or maternity claims. So, while it sounds plentiful, there are limitations to restoration; understand those limitations so you are not surprised by them when it comes time to settle a claim,” says Varma.
