Health insurance policies are designed to provide financial protection to individuals and their families against unexpected medical expenses. These policies offer various benefits, including coverage for hospitalization, surgeries, diagnostic tests, and medication costs. However, some policies come with additional benefits, such as the restoration benefit. The restoration benefit is an essential feature that can prove to be beneficial in case of multiple claims during a policy year.
The restoration benefit is a type of health insurance add-on that allows policyholders to restore their entire sum insured amount if it gets exhausted due to previous claims. In simpler words, it is an additional cover that comes into play when the basic sum insured amount is used up by the policyholder on previous claims.
Understanding Restoration Benefit
Let us understand the concept of restoration benefit through an example. Suppose you have a health insurance policy with a sum insured of INR 5 lakhs. During the policy year, you suffer from a medical condition that requires hospitalization and treatment, which results in a claim of INR 2 lakhs. Later, in the same policy year, you develop another medical condition that requires hospitalization and treatment, resulting in a claim of INR 3 lakhs. In this case, your total claim amount will be INR 5 lakhs, which is equal to your sum insured.
Now, if your policy includes a restoration benefit, your sum insured would be restored after the first claim itself. So, in the above-mentioned scenario, your total sum insured will become INR 5 lakhs + INR 5 lakhs (restored amount) = INR 10 lakhs. Therefore, you can make an additional claim of up to INR 5 lakhs in the same policy year without any worry, as the restoration benefit will cover it.
Importance of Restoration Benefit
The restoration benefit is an essential feature of health insurance policies, particularly for individuals who are prone to illnesses or have a medical history. It provides an additional cushion of financial protection in case of multiple claims during a policy year. Here are some reasons why restoration benefit is crucial:
1. Protection against Exhaustion of Sum Insured
In a traditional health insurance policy, the sum insured is fixed for a particular policy year. If a policyholder exhausts the sum insured amount due to multiple claims, the person will not be eligible for any further claims in the same policy year. However, with a restoration benefit, the policyholder can restore the entire sum insured amount and make multiple claims in the same policy year without worrying about the expenses.
2. Cost-effective Add-on Feature
Restoration benefit is an add-on feature that comes at an additional premium cost. However, compared to the benefits it provides, the cost of this feature is relatively low. It proves to be a cost-effective way to enhance the coverage of your existing health insurance policy.
3. Useful for Individuals with Prone Medical Conditions
Individuals with pre-existing medical conditions or those prone to illnesses can benefit significantly from restoration benefit. It provides an additional layer of financial protection, ensuring that they never run out of coverage when they need it the most.
4. Ensures Continuous Coverage
The restoration benefit ensures that the policyholder has continuous health insurance coverage throughout the policy year. With restoration benefit, the policyholder can make multiple claims without worrying about exhausting the sum insured amount. This ensures that they remain covered for unforeseen medical expenses, providing peace of mind.
How You Can Use Restoration Benefit in Your Health Insurance Policy
In health insurance policies, restoration benefit refers to a feature that reinstates the entire sum insured or a portion of it, in case you exhaust your entire coverage during the policy year. This means that if you have already made claims worth the sum insured and need further medical treatment, the insurer will restore the full sum insured back to your policy.
Here’s how you can use restoration benefit in your health insurance policy:
1. Assume you have a health insurance policy with a sum insured of Rs. 5 lakhs and you fall ill. You make a claim of Rs. 3 lakhs for hospitalization expenses. After this, you fall ill again and require further treatment. Since you have exhausted your entire sum insured, you cannot make any more claims.
2. However, if your policy has a restoration benefit, the insurer will restore your entire sum insured of Rs. 5 lakhs back into your policy after the first claim is made. This will provide you with additional coverage for any further medical treatment required within the same policy year.
3. It is important to note that restoration benefit is subject to certain terms and conditions, such as the maximum number of times it can be used during the policy period or the minimum time gap between two claims. These conditions can vary between different health insurance policies, so it is important to read the policy documents carefully.
Conclusion
Health insurance is an essential investment one should make to secure their financial future and protect themselves from unexpected medical expenses. While purchasing a health insurance policy, it is important to understand the various add-on features available. The restoration benefit is an excellent feature that ensures continuous coverage and financial protection against unforeseen medical expenses. It is a cost-effective add-on that can prove to be beneficial for individuals with pre-existing medical conditions or those prone to illnesses. Therefore, it is recommended to opt for restoration benefit while purchasing a health insurance policy to enhance your coverage and secure your financial future.
