Restoration Benefit in Health Insurance

It is 2025 and in this new decade, the world is amidst dealing with a pandemic situation. Health that took a backseat in our daily hustle managing work and personal lives, has suddenly gained prominence. The adage, health is wealth has strengthened its foundation again. Keeping all of this in mind, availing a health insurance policy is of prime importance. When buying a health insurance policy, the first thought that strikes is what if it gets exhausted. But modern-day policies come equipped with a host of features, one among which is the restoration benefit.

How Does Restoration Benefit Work?

Restoration benefit in health insurance replenishes the sum insured once it is exhausted due to medical claims within the policy year. It acts as a financial safety net, ensuring that policyholders remain covered for additional medical expenses. This benefit is triggered automatically when the insured amount is depleted. For example, if a policyholder has a sum insured of ₹5 lakh and incurs a claim of ₹4 lakh, they are left with ₹1 lakh for the remaining policy period. If another significant claim arises, the restoration benefit restores the sum insured to its original amount, offering continued coverage. However, it is essential to note that the restoration typically applies only to unrelated illnesses or accidents in the same year and does not cover claims for the same illness.

What is the Restoration of Cover in Health Insurance?

Restoration benefit is a facility where the insurance company restates the sum assured of your insurance cover to its original amount once it is exhausted. With this feature, you need not worry even if you end up exhausting the sum assured of your health cover. Let us understand the restoration benefit in health insurance with an example. Mr Kishan has a family health cover of ₹8 lakhs with restoration benefit. Due to his critical heart condition, he had to undergo an operation where this entire amount of sum assured got exhausted. Now in the following months, he suffered from a stroke and had to again get operated for which the treatment cost was ₹4 lakhs. Since a restoration benefit is available for the insurance policy of Mr Kishan, the second treatment is also covered by his insurance company.

Why is it essential to have a restoration benefit in health insurance plans?

With the growth of lifestyle diseases and soaring treatment costs, it often happens that the sum assured amount may seem inadequate after a few years. At this time, having a backup plan in the form of restoration benefit will act as a safeguard, thereby providing additional coverage if required. Thus, make the right choice and opt for a recovery benefit in your health insurance policy.

Types of Restoration Benefit

1. Complete Exhaustion Restoration

This type of restoration benefit is activated only when the entire sum insured under the health insurance policy is completely utilized. Once your base coverage is fully exhausted due to medical claims, the insurance company restores the sum insured to its original amount for any future claims within the same policy year.

2. Partial Exhaustion Restoration

Unlike the complete exhaustion restoration, this type activates even if the sum insured is only partially utilized. If you have used a portion of your base coverage but still need additional coverage for ongoing or new medical claims, the unused portion of the sum insured is replenished. Also Read: Everything About Health Insurance for People with Heart Diseases

Benefits of Buying a Health Insurance Plan with Restoration Benefits

1. Enhanced Coverage

Restoration benefits replenish your sum insured during the policy year after it has been exhausted, ensuring you have coverage for additional medical expenses.

2. Financial Security During Multiple Claims

These benefits are particularly helpful if you or your family members face multiple illnesses or accidents in the same year, reducing out-of-pocket expenses.

3. Ideal for Family Floater Plans

In family floater policies, restoration benefits provide peace of mind by covering multiple family members, even if one member exhausts the entire sum insured.

4. Applicable for Unrelated Ailments

Restoration benefits are often available for unrelated ailments or accidents, ensuring comprehensive support for diverse health issues.

5. Unlimited Restoration Options

Some plans offer unlimited restoration, enabling multiple replenishments within the same policy year, offering extensive financial protection.

6. Cost-Effective Solution

Buying a plan with restoration benefits can reduce the need for a higher sum insured, as the replenishment feature provides extended coverage at a relatively lower premium.

7. Support During Critical Illnesses

These benefits are particularly advantageous when dealing with costly treatments or prolonged hospitalizations, ensuring continuous financial support. A health insurance plan with restoration benefits ensures you and your loved ones are protected against unexpected medical expenses, offering flexibility and security. Also Read: Benefits of Health Insurance with OPD Cover

Features of Restoration Benefits in Health Insurance

1. Replenishment of Sum Insured: Restoration benefits allow the sum insured to be replenished after it has been completely utilized during the policy year, providing additional financial coverage.
2. Applicable for Unrelated Claims: Most policies offer restoration benefits for unrelated illnesses or accidents, ensuring coverage for new medical events during the same year.
3. Single-Use or Multiple-Use Options: Depending on the policy, restoration benefits may be used once or multiple times within the same policy year, offering flexibility in coverage.
4. Family Floater Advantage: In family floater plans, restoration benefits apply to any insured family member, ensuring protection for the entire family even if one member exhausts the sum insured.
5. No Carry-Forward: Restoration benefits are valid only for the ongoing policy year and do not carry forward to the next policy period, encouraging policyholders to utilize them within the tenure.
6. Cost-Effective Feature: Restoration benefits eliminate the need to opt for a very high sum insured, as the replenishment provides extended coverage at a nominal additional cost.
7. Not Applicable for the Same Illness: Typically, restoration benefits are not applicable for claims related to the same illness or hospitalization, ensuring they are used only for distinct medical events.

Who should opt for a Restoration Benefit?

Our advice shall be anyone and everyone who can afford this additional feature should opt for it. A case of multiple hospitalisations is rare, but so are medical emergencies. But if not for all, then at least health insurance plans for family should be loaded with a restoration benefit. When you purchase a recovery benefit in your health insurance plan, the entire sum assured that ‘floats’ between the beneficiaries can be restored for it to be available for other members of the policy.

Things to Consider While Opting for Restoration Benefit in Health Insurance

1. Eligibility Criteria: Understand the conditions under which restoration benefits are applicable, such as whether they cover all illnesses or are limited to unrelated claims.
2. Coverage for Same Illness: Most restoration benefits do not apply to the same illness or hospitalization in the same policy year. Verify if your insurer offers flexibility in this regard.
3. Type of Health Insurance Plan: If you're considering a family floater plan, ensure the restoration benefit applies to all members and offers sufficient coverage for multiple claims.
4. Cost of Premiums: While restoration benefits enhance your coverage, they may increase your premium. Compare the additional cost with the benefits provided to assess its value.
5. Number of Restorations Allowed: Check how many times the sum insured can be restored in a single policy year. Some plans allow multiple restorations, while others may limit it to one.
6. Nature of Claims: Determine if the restoration benefit applies only to inpatient treatments or if it includes day-care procedures and other medical expenses.
7. No Carry-Forward Provision: Restoration benefits are generally valid only for the current policy year and cannot be carried forward. Utilize the feature within the policy term if needed.
8. Waiting Period and Exclusions: Ensure that the restoration benefit is available from the first policy year and check for exclusions that might restrict its use.

Also Read: Benefits of Porting Health Insurance Policy

FAQs

What is the period of restoration?

The period of restoration refers to the timeframe within which the sum insured is reinstated after being exhausted due to medical claims. It is typically effective immediately after the insured amount is used up and remains valid for the remaining policy period.

What is the extended period of restoration?

The extended period of restoration allows for the restoration of the sum insured beyond the policy term in certain cases, such as when a claim is filed close to the policy expiration date. It ensures coverage for an additional period as specified by the insurer.

What is the time limit for restoration?

The time limit for restoration benefits is usually the same as the policy period. Restoration can be utilized only during the ongoing policy year and does not carry over to the next renewal period.

Can two members of the family suffering from the same disease claim restoration benefits?

No, most policies with restoration benefits do not cover claims for the same illness or disease under the restored sum insured. Restoration benefits are typically applicable to unrelated illnesses or accidents.

What is the restoration period in insurance?

The restoration period in insurance refers to the duration within a policy year when the sum insured is replenished after being completely utilized. It ensures continuous coverage for new and unrelated medical events during the same policy year. *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.