What Is Restoration Benefit in Health Insurance & How Does It Work?

Health insurance is essential to financial planning, providing crucial support during medical emergencies. However, even with comprehensive coverage, medical expenses can sometimes exceed the sum insured. This is where the restoration benefit in health insurance becomes invaluable. This article will explore the restoration benefit in health insurance, its types and features, and how it can benefit policyholders. 

What is Restoration Benefit in Health Insurance?

Restoration benefit in health insurance is an add-on or built-in feature in some policies that reinstates the sum insured after it has been exhausted within the policy year. Suppose the medical expenses during a policy year exceed the initially insured amount. In that case, the restoration benefit will automatically replenish the sum insured, allowing for additional claims without purchasing extra coverage or a new policy. 

How Does It Work?

Let's illustrate this with a detailed example: 

Scenario 

• Initial Sum Insured: Rs 5,00,000 

• Medical Expenses: Rs 5,00,000 (exhausting the initial sum insured) 

Once the initial sum insured is exhausted, the restoration benefit in health insurance policy kicks in, restoring the sum insured back to Rs 5,00,000. This restored amount can be used for further medical expenses within the same policy year. 

Detailed Example 

Situation 1: Single Large Claim 

Claim 1: You have a medical emergency and incur expenses of Rs 5,00,000. 

• Your initial sum insured of Rs 5,00,000 is exhausted. 

• The restoration benefit restores the sum insured back to Rs 5,00,000. 

Claim 2: Later in the same policy year, you face another medical emergency and incur expenses of Rs 3,00,000. 

• The restored sum insured of Rs 5,00,000 covers this claim. 

• You still have Rs 2,00,000 available for any future claims within the same policy year. 

Situation 2: Multiple Smaller Claims 

Claim 1: You have a medical procedure costing Rs 2,00,000. 

• Your sum insured reduces to Rs 3,00,000. 

Claim 2: Another medical expense of Rs 3,00,000 arises. 

• Your sum insured is now exhausted. 

• The restoration benefit restores the sum insured back to Rs 5,00,000. 

Claim 3: Later, you incur another medical expense of Rs 4,00,000. 

• The restored sum insured covers this expense. 

• You still have Rs 1,00,000 available for future claims within the policy year. 

Benefits of Restoration Benefit

1. Enhanced Financial Protection: It provides an additional financial safety net, ensuring you are not uncovered during a policy year despite multiple claims. 

2. Peace of Mind: Knowing that your sum insured will be restored provides peace of mind, allowing you to focus on recovery rather than financial concerns. 

3. Cost-effective: Although policies with restoration benefits might come with a slightly higher premium, they are more cost-effective compared to buying a new policy or increasing the sum insured each time it's exhausted. 

4. Comprehensive Coverage for Families: In family floater plans, the restoration benefit ensures that all family members continue to have coverage even after the sum insured is exhausted by one or more members. 

Types of Restoration Benefit

There are primarily two types of restoration in medical insurance: 

• Complete Exhaustion Restoration: This type restores the entire sum insured only after it has been completely exhausted. For instance, if your sum insured is Rs 5,00,000 and you use up this amount, the restoration benefit will replenish it with another Rs 5,00,000 for future claims within the same policy year. 

• Partial Exhaustion Restoration in medical insurance: This type activates even when the sum insured is partially exhausted. For example, if you have a sum insured of Rs 5,00,000 and use Rs 4,00,000, the restoration benefit can replenish a portion of the sum insured, allowing you to continue making claims. 

Features of Restoration Benefits in Health Insurance

Understanding the restoration benefit of health insurance meaning is crucial for making informed decisions. Here are some key features: 

• Non-carry forward: The restored sum insured does not carry forward to the following policy year. It is only applicable within the current policy year. 

• Future claims: The restoration benefit is only available for future claims, not ongoing ones. 

• Multiple claims: You can make multiple claims within the policy year, provided the sum insured is restored each time it is exhausted. 

• Applicable to all sums insured: This benefit is not limited to high sum insured policies. You can opt for it regardless of your sum insured. 

Things to Consider While Opting for Restoration Benefits in Health Insurance

When considering the restoration benefit in health insurance, keep these points in mind: 

• Claim Process: Ensure that the claim process for the restoration benefit is straightforward and hassle-free. 

• Exclusions: Be aware of any exclusions, such as pre-existing conditions or specific treatments, that may not be covered. 

• Waiting Period: Check if there is a waiting period before the restoration benefit becomes active. 

• Frequency of Restoration in medical insurance: Determine how often the sum insured can be restored within a policy year. Most policies allow restoration only once a year. 

• No Carry Forward: Remember that the restored sum insured cannot be carried forward to the following policy year. 

How to Buy a Restoration Benefit Plan?

You can buy a restoration benefit plan as a standalone policy or as an add-on cover to your existing health insurance policy. When purchasing, consider the following: 

1. Premium Costs: Restoration benefits typically come with an additional premium. However, the extra cost is often justified by its additional coverage. 

2. Conditions: Understand the terms and conditions associated with the restoration benefit, including exclusions, waiting periods, and claim processes. 

Importance of Restoration in Health Insurance

The restoration benefit in health insurance is crucial for several reasons: 

• Enhanced Financial Protection: It provides an additional financial cushion by replenishing the sum insured after it is exhausted. 

• Peace of Mind: Knowing you have a backup in case of high medical expenses gives you peace of mind. 

• Multiple Claims: It allows for multiple claims within the same policy year, which is especially beneficial for individuals with recurring medical issues. 

Benefits of Restoration Benefit for Policyholders

Opting for a health insurance plan with restoration benefits offers several advantages: 

• Increased Coverage: It increases the total coverage, providing better financial protection against high medical costs. 

• Cost-effective: Though it comes with a slightly higher premium, the restoration benefit is cost-effective in the long run as it saves you from purchasing another policy. 

• Family Floater Plans: In family floater plans, any family member can utilise the restored sum insured, offering comprehensive coverage for the entire family. 

Limitations and Considerations

While the restoration benefit in health insurance is beneficial, there are some limitations to be aware of: 

• Same Illness: The restoration benefit may not apply to claims for the same illness within a policy year. 

• Single Restoration: Most policies allow only one yearly restoration of the sum insured. 

• Higher Premium: Policies with restoration benefits typically have higher premiums. 

Conclusion

The abovementioned restoration benefit in health insurance highlights its importance and utility for policyholders. It ensures that you are financially protected even when medical expenses exceed your policy's sum insured. By understanding the restoration benefit of health insurance meaning and its features, you can make an informed decision and choose a plan that best suits your needs. 

Enhance Your Coverage with Restoration Benefit at ManipalCigna Health Insurance

Don’t let high medical expenses catch you off guard, opt for a health insurance plan with a restoration benefit to ensure your sum insured is replenished and you’re covered for additional claims within the same policy year. Visit ManipalCigna Health Insurance to learn more and find the perfect plan for your needs. Secure your health and peace of mind with ManipalCigna today!