Restoration Benefit in Health Insurance & Its Importance

Name: Restoration Benefit in Health Insurance: Meaning and Importance
Brand: Axis Max Life Insurance
Rating: 4.4 (1209 reviews)

Understanding the terms and conditions of your health insur

Written by

Abhishek Chakravarti

BFSI Writer

Abhishek is a financial writer with over 6 years of experience in the BFSI sector. Prior to his current stint with Axis Max Life Insurance, he has worked with leading fintech startups. He specializes in writing about taxation and various investment products like ULIPs, retirement plans, guaranteed investment plans, mutual funds etc.

Reviewed by

Sahil Rawal

BFSI Expert

Sahil Rawal is a digital & brand management specialist with over 10 years of experience in Financial Services Industry. Life insurance professional with expertise in digital marketing strategy, website content marketing and brand communication designed to increase brand awareness, drive engagement & sales.

What is Restoration Benefit in Health Insurance?

Restoration benefit is a feature in some health insurance plans that can be a lifesaver when it comes to financial protection during medical emergencies. Also known as a refill benefit, it is an add-on or in-built feature in some health insurance policies. It allows you to 'restore' or 'recharge' your sum insured amount once you have exhausted it by filing claims in a policy year.

There are mainly two types of restoration benefits offered in a health insurance policy as given below:

1. Complete Exhaustion: This gets activated when the original sum insured has been utilised fully. This means that if your sum insured is Rs 10 lakhs and you have used up this amount 100% by making a claim, the restoration benefit will get activated so that you can make another claim of the same amount in the same policy year.

2. Partial Exhaustion: As the name suggests, partial restoration comes into place when a pre-determined amount of sum insured is used up in one claim in a policy year. To understand better, suppose your health insurance policy offers you with Rs 10 lakhs of sum insured and you have used up Rs 6 lakhs. Now if you have opted for the partial restoration benefit, as soon as you make and get the claim amount of Rs 6 lakhs, your sum insured will be restored to the original sum of Rs 10 lakhs that can be used up later.

How Does the Restoration Benefit Work?

Here's how restoration benefit typically works in health insurance:

1. Exhaustion of Sum Insured

When you make a claim that equals or surpasses your sum insured amount in a policy year, your regular policy would consider the sum insured as consumed.

2. Restoration

With the restoration benefit, if your sum insured is exhausted during the policy year, the insurer automatically restores the entire sum insured for the same policy year. This means you get a fresh coverage amount to use for any new illnesses or medical expenses within the same year.

The process of restoration works in two ways as mentioned below:

● Partial Exhaustion: Under this feature, your insured amount gets refilled even if a part of it has already been used. This allows you to always avail maximum coverage during the unfortunate case of any second emergency during the same policy year.

● Full Exhaustion: With this feature, the sum insured gets fully restored only when the entire amount of the coverage has already been exhausted.

3. Continued Coverage

Restoration benefit ensures that your health coverage continues even if you've exhausted your initial sum insured, offering you additional financial support during the rest of the year.

Importance of Restoration Benefit in Health Insurance

The restoration benefit holds immense importance in health insurance for several reasons, viz.:

● Extended Coverage: In the unfortunate event of a severe illness or accident, medical expenses can quickly deplete your sum insured. Restoration benefit provides an extension of your coverage, ensuring you have financial support when you need it the most.

● Continuous Protection: Health issues may not wait for your policy to renew. Restoration benefit ensures that your health coverage remains uninterrupted throughout the policy year, even if you've already claimed your entire sum insured.

● Cost-efficiency: It can be cost-effective compared to purchasing a higher sum insured. With the restoration benefit, you get additional coverage within your existing policy, saving you from paying higher premiums for an increased sum insured.

● Peace of Mind: Knowing that you have a safety net of renewed coverage offers peace of mind. You won't have to worry about exhausting your sum insured and facing financial strain during a medical crisis.

Frequently Asked Questions (FAQs)

What types of health insurance policies offer restoration benefit?

Is restoration benefit available for every claim, or are there limitations?

Can I carry forward the restored sum insured to the next policy year if I don't use it?

Is restoration benefit available for pre-existing conditions?

Do I need to pay an extra premium for restoration benefits?

ARN: MAY24/Bg/24

Source:

business.outlookindia.com/insurance/restoration-benefit-in-health-insurance-how-it-works-its-benefits-and-demerits-news-306240

www.outlookindia.com/business/restoration-benefit-in-health-insurance-how-it-works-its-benefits-and-demerits-news-306240

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