Summary of this article
Sum insured restoration refills cover after a claim within policy year
Allows multiple hospitalisations without exhausting insurance protection
Some plans restrict restored cover to different illness or family member
Experts say restoration supplements but cannot replace base cover
What happens if you need hospitalisation more than once a year? For such situations, there are covers with sum insured restoration features that restore your cover once it expires. We take a look.
The sum insured restoration feature activates automatically. “It replenishes the coverage amount after it's been drawn upon, in whole or in part, due to a claim made within the policy year,” says Manish Dodeja, Chief Operating Officer, Care Health Insurance.
This replenished amount is then available for any further hospital stays within that same policy period, providing policyholders with extra financial security. This feature is especially beneficial for families where several members might need hospitalization in a single year.
Think of it as a safety net that resets. “If a Rs 10 lakh policy is exhausted by one major surgery, the insurer 'refills' that Rs 10 lakh automatically for future claims. In modern 'unlimited' plans, this can trigger multiple times—say, for a heart procedure in January, a road accident in May, and a critical illness in October. It ensures a single massive claim doesn't leave the family vulnerable for the rest of the policy year,” says Dodeja.
Terms And Conditions
While sum insured restoration benefits significantly benefit individuals, they may come with certain terms and conditions outlined in the policy documents. Many policies state that the restored sum insured can only be used for a different illness or for another family member covered in the family floater plan.
Whereas in other cases, coverage for the same individual for the same illness may be applicable. In addition to this, the restoration benefit kicks in only once the complete initial sum insured is depleted. “While certain other products might reinstate even a partially utilized portion of the initial sum insured. Consequently, it's essential for policyholders to thoroughly review their policy's particulars to grasp the precise conditions and timing for benefit disbursement,” says Dodeja.
Restoration Cannot Replace Base Cover
When families evaluate health insurance policies, they should scrutinize the configuration of the restoration benefit, including its applicability to identical or distinct medical conditions, its potential for multiple activations within a single year, and its availability for the same insured individual.
Restoration is a brilliant 'buffer,' but it’s not a substitute for a solid base cover. Why? Because a single, high-cost surgery (like a transplant) cannot be paid for by restoration, it only pays up to the base limit per claim. “Families should prioritize a base sum that covers one worst-case scenario comfortably. Use restoration as a tool to handle the frequency of illnesses, not to compensate for an inadequate depth of primary insurance,” says Joshi.
