Without a doubt, health insurance is the shield that can help you meet unexpected and large medical emergencies. In the absence of a comprehensive health cover, you would have to rely on your savings or even worse –high interest personal loans. Using your savings means sacrificing your other essential goals– your daughter’s education, your retirement or the dream house you were panning for. Hence, buying a health insurance is crucial for your financial health. But buying a policy is also a tough task– a lot of insurers to shift through and lot of features to get your head around. In this blog we are discussing one of the lesser understood but incredibly valuable feature, restoration benefits.

To truly understand the importance, let’s delve deeper into Mr. Abhik, whose experiences shed light on the transformative power of restoration benefits in health insurance. Mr. Abhik has a health insurance policy of Rs 5 lakhs, a seemingly solid shield against life’s uncertainties. But when he met with an unfortunate accident, fate took an unexpected turn. His subsequent health battle cost him Rs 5 lakhs, causing him to use all his cover. Months later, as fate would have it, another health challenge arose for him– a heart-related illness that required an additional Rs 2 lakhs for a critical surgery. At this point Restoration Benefit came to the fore, acting as the shield for him. Despite the decline due to prior treatment related to the accident, the health insurer recouped the cost due to the presence of restoration benefit. This enabled him to easily claim the hospitalization expenses of Rs 2 lakhs for the surgery without bearing the financial burden himself.

Types

There are two primary types of restoration benefit in health policies – restoration with complete exhaustion of the Sum Insured and restoration with partial exhaustion of the Sum Insured. The former triggers the benefit only when the entire sum insured is exhausted, while the latter activates even when there is a partial depletion in the sum insured.

Advantages of Restoration Benefit

Beyond Mr. Abhik's story, restoration benefits prove to be a versatile tool, especially if you have bought family floater plans. Imagine a scenario where one family member depletes the sum insured due to hospitalization. Restoration benefit steps in these crucial scenarios, providing coverage for subsequent hospitalizations as it restores the sum insured up to the original cover.

Disadvantages of Restoration Benefit

Restoration benefits are not without their drawbacks. Here are some key points to be aware of:

• Restoration benefit is generally not applicable for the treatment of the same disease. Hence, if you are admitted for a kidney ailment and few months later you happen to be admitted for the same ailment, the restoration will not work. Some insurers do provide the restoration benefit for the same disease with gaps between hospitalisation.
• Some policies have restrictions on the number of times a policy can be restored per year while other offer unlimited restoration. Hence, be sure to check the restrictions.
• There may be restriction on when the policy is restored. Some policies restore only when the entire sum insured is exhausted while others restore even with partial exhaustion of the cover. The latter should be preferred. Policies can also have restrictions on restoration with respect to certain specific illnesses– you must check for these restrictions.

Remember that restoration benefits lead to higher premium compared to a policy that doesn’t have this feature. But it can be worth the cost if your budget allows.

Conclusion

While restoration benefits present themselves as a safety net, it is essential not to rely on them exclusively. The prudent approach when buying yourself a health policy should be to buy a base cover and a large top-up health insurance. Even in a scenario with restoration benefit, it is crucial to remember that the maximum coverage is confined to the sum insured under the policy. Exhaust that, and you may find yourself reaching into your own pocket. Therefore, while restoration benefit acts as a valuable addition don’t make it the sole pillar of your health insurance.

~ Nischay Avichal