Restoration Benefit in Health Insurance: All You Need to Know

The sight of emptiness fills one with apprehension. Even the word itself seems to incite some anxiety among people. Then, what happens to them once their health insurance sum insured is exhausted? That must be a frightful experience. After all, it has some dire consequences – how will they fulfil payments for treatment and other related expenses?

During the initial onslaught of COVID-19, those with ongoing health insurance policies quickly realised their mistakes. Purchasing policies with a lower sum insured in exchange for a low premium was a bad idea. As healthcare expenses soared, their sum insured depleted with growing medical bills.

Some people completely exhausted their policy’s guaranteed sum insured. And, what next? Without another policy to cover their medical bills, they had no choice but to pay for these expenses themselves. It pushed the fragile finances of many households. While their budgets buckled under the pressure of rising expenses, they looked for other avenues to make ends meet.

So, what can you do to avoid facing these situations yourself? Paying for medical expenses like hospitalisation out of your pocket is no joke! Based on the illness and its recommended treatment, medical bills shoot up to lakhs of rupees. Simply owning basic health insurance with a minimal sum insured won’t be enough – you need restoration benefit.

Without one, your finances would quickly topple while dealing with healthcare expenditures. Keep reading to learn more about restoration benefits and how they work. It might be just the thing between your medical needs and sky-high expenses.

The What & How of Restoration Benefits  

In health insurance, restoration benefit acts as a backup for the sum insured. After the recent pandemic, more people have grown reliant on this feature, and with good reason, too! This feature activates itself to fund the necessary expenses and treatments if a policyholder exhausts their sum insured.

The restoration benefit feature has become quite popular among owners of family floater policies. Since there are multiple members under the plan, there will be more occasions for claims. That said, it could quickly result in an emptied-out sum insured. People can restore the sum insured and cover medical expenses with the restoration benefit.

Moreover, this feature is in-built into most comprehensive health insurance policies. It is wise to back up your health insurance to avoid unpleasant situations like an exhausted sum insured. During a medical crisis, it could wipe out your finances.  

Types of Restoration Benefits  

Carefully read the fine print on the health insurance policy to understand which of the two restoration benefits are available for you. 

Complete Exhaustion 

This benefit will only be activated once the sum insured has been exhausted. Most health insurance providers offer policyholders this benefit to aid their finances.

Partial Exhaustion 

Here, the restoration benefit is applicable only after part of the sum insured has been exhausted. Typically, policyholders prefer this restoration benefit since it’s easier to avail and activates sooner than its counterpart.  

Who Should Purchase Restoration Benefit?  

While individuals can benefit from the feature, its best recommended for those with family floater policies. It backs up your sum insured and helps you get the best out of the policy. Since there are multiple individuals covered under the policy, it increases the likelihood of exhausting the sum insured.

Moreover, it will provide all members with an opportunity to avail funds whenever necessary for medical expenses. Here’s how the scenario could play out.

Mr. Prakash owns a family floater policy that covers his wife and two children for a sum insured of ₹5 lakhs. However, his wife was recently diagnosed with an illness and her treatment consumed the entire sum insured amount. Soon after, their daughter began experiencing fainting spells and grew sick. Fortunately, Mr. Prakash was able to reinstate the sum insured with the restoration benefit and avail the necessary funds for his daughter’s treatment.  

However, there are some drawbacks to opting for this feature. Like any other add-on or extra feature, going for the restoration benefit will increase the cost of the premium. Since it’s a feature that provides the policyholder with an additional cover, they will be subject to bearing the extra hike in the premium. It might seem like a bit of a stretch, but the benefits outweigh the cons.

Points to Keep in Mind  

Before purchasing health insurance policies with in-built restoration benefits, consider the following factors.  

• It comes at a nominal additional premium  
• Most insurers offer restoration benefits for unrelated medical conditions
• It’s considered an add-on benefit to the policy
• It activates depending on the type of restoration benefit available
• The restored sum insured cannot be carried forward to the following policy year
• Policyholders cannot activate the benefit during the first claim
• It can be applied to any sum insured
• It is applicable only on future claims 

With this information in mind, ensure that you only purchase the best policy for yourself and your dependants. The restoration benefit is nothing short of a life-saver for your finances during a medical emergency. Browse a variety of comprehensive health covers by visiting Bajaj Markets today!