What does restoration benefit mean in terms of health insurance? What gaps exist in the advantages of restoration? Must you depend on these advantages?
Health insurance uses a lot of jargon, which we never really understand and instead of looking at in-depth, we just look at things at random. The restoration benefit in health insurance is one example of such a provision.
What is Restoration Benefit in Health Insurance?
Assume for the moment that Mr. Tushar is covered for Rs. 5 lakh by health insurance. Unfortunately, a cancer diagnosis was made. He had to pay Rs. 5 lakh for the therapy, and as a result, his health insurance was fully depleted.
A few months later, he received another heart-related diagnosis. He needs to spend two lakh rupees for this. Luckily, he chose the restoration benefit while purchasing health insurance. He may thus claim the Rs. 2 lakh hospitalisation charges for his heart-related illness, even if the whole sum promised was depleted owing to his cancer hospitalisation. This is because the health insurance provider restored the money assured.
He was required to pay Rs. 2 lakh out of his own cash if this feature wasn’t present.
Types Of Health Insurance Restoration Benefits
There are two categories of restoration choices. First, you need to know which of these you are receiving from your health insurance provider.
- Total depletion of the Sum Insured: Under this scenario, the reward is only payable if the full amount of the sum insured is used up.
- Partial depletion of the Sum Insured: If this option is selected, the benefit will still be payable even if the sum insured is only partially used up.
Advantages of Restoration Benefit in Health Insurance
This will be useful, particularly for plans with family floaters. Let’s say a family of four has one hospitalised member and the whole amount of insurance is depleted. After a few months, if an unfortunate event occurs and another family member needs to be hospitalised, this restoration benefit serves as a lifesaver at that time.
The restoration benefit replenishes the covered amount to the basic policy limit by a certain percentage, often 100%.
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Disadvantages of Restoration Benefit in Health Insurance
You could have to pay a greater premium for this feature than for one that doesn’t provide such a benefit.
In most cases, restoration benefits under health insurance do not apply to the same illness. If a patient is admitted to the hospital for cancer treatment after a few months of being there for treatment, their health insurance will not pay the restoration benefit. Few insurers, however, could pay a greater premium in order to give restoration benefits for the same sickness after a 30- to 45-day hospital stay.
The restoration benefit is only applicable to subsequent hospital stays, not to the same ones. Assume Mr. X has a Rs. 5 lakh health insurance policy. The cost of his hospital stay was Rs. 8 lakh. Since his insured sum was depleted, he will not benefit from restoration in this instance. primarily because the restoration benefit only applies to hospital stays in the future—not to hospital stays for the same illness.
Only in the event that a single claim exhausts the whole sum covered is the overall sum insured reinstated. However, some health insurance companies also provide the restoration benefit as soon as a hospital stay is necessary. Selecting a restoration benefit that is renewed without depleting the insured amount is preferable.
Additionally, some policies have an unlimited number of restorations throughout the insurance year. Few people have limitations on these kinds of numbers.
A few plans only allow the restoration benefit to be activated once in a lifetime for serious conditions like renal failure or cancer. See whether your insurance has any such limitations.
It could be stipulated in the policy document that specific ailments specified therein are not eligible to receive the restored amount. Check the list of prohibited disorders to obtain this restorative benefit.
Even while it appears great in simple, you can never completely rely on the restoration advantage. Having substantial base and excellent top-up health insurance is always preferable. primarily because, let’s imagine, your health insurance policy’s restoration benefit allows you to be hospitalised for unrelated reasons, fully, and an infinite number of times per year. However, take note that the maximum coverage under the policy is the amount you have chosen to be covered for. And if you use up all of the insurance amount? It must be paid for out of your own wallet. So let’s choose this advantage but never rely on it as an add-on.