Restoration benefit is an important part of a health policy that reactivates the sum insured once the expenses are exhausted. But its rules can be complex. Some also have a cool-off period. Let us understand in simple terms what restoration benefit is and how it works.
No one knows when a disease will strike or when a particular accident will happen to whom. But a person can definitely prepare himself for such difficult situations. Imagine, if someone in the family suddenly has to be hospitalized and the cost of treatment reaches ₹ 10 lakh, what will you do? And if someone falls ill again in a year, then where will the same expense come from again?
People take health insurance thinking this. But when the need arises, an important feature of the policy, Restoration Benefit, often does not work as expected. Restoration benefit means that when your sum-insured amount is completely spent, the policy reactivates that amount. But there are many terms and conditions hidden in it, which are often not told to the common people.
Let us know what this feature is, when it helps and when it can deceive you.
How does restoration benefit help?
Most health insurance policies provide coverage of ₹5 to ₹10 lakh. But if you have to go to the hospital twice in the same year, or two family members fall ill, then the one-time amount may fall short. In such a situation, restoration benefit revives your policy.
A client of InsureSmart founder Neeraj Khusalani took advantage of this, whose family floater policy was of ₹10 lakh. Both the husband and wife had to go to the hospital in an accident. The bill went beyond ₹15 lakh. But their restoration benefit reactivated the policy and the entire expense was covered.
When does a policy feature cheat you?
Dr Praful Shah from Mumbai had a different experience. He needed chemotherapy every 21 days. He thought the restoration benefit would help after the base coverage was over. But the policy had a cool-off period of 45 days, meaning a gap of 45 days was necessary between two claims. Since there was a gap of 21 days in his treatment, the benefit never got activated.
There was no financial burden on the family
A client of insurance consultant Mitesh Dave got a great benefit from the restoration benefit. The person had cancer and first he underwent a surgery worth ₹4.29 lakh, which was covered by his base health insurance cover of ₹10 lakh. After the surgery, he had to undergo chemotherapy continuously. The good thing was that there was no cool-off period between claims in the policy, so the cost of every session was covered without any delay.
Later, the patient was admitted to the hospital for stem cell transplant. But he could not be saved. The entire treatment and hospitalization was over in just 23 days. Mitesh Dave said, “The base cover was only ₹ 10 lakh, but due to the restoration benefit, a claim of about ₹ 17 lakh was received. The patient did not survive, but his family did not have to pay anything from their pocket.”
Restoration is not the same in every policy
The benefit of restoration is available in every policy on different conditions. In some plans, it is available only once, and that too for different diseases and different people. Some plans also cover the same patient twice.
In some policies, restoration starts only after the entire sum insured is exhausted (auto-restore). In some, it becomes active even after partial use (partial exhaustion). This decides how much money you will get in the next claim.
Before buying a policy, pay attention to these things:
Will the restoration be available every time or only 1-2 times?
Is it applicable to the same person and disease?
Will it be applicable for the same hospitalization or will it be available only next time?
Is there a cool-off period?
Companies like Ditto Insurance recommend that you understand these nuances while buying a policy.
