What Is The Term 'Restoration Of Sum Insured' In The Context Of Health Insurance?

Restoration benefit - also called Restore, Reinstatement, Refill or Reset by different insurance companies, is a feature that restores your sum insured after it has been exhausted, within a policy year. 

Some Important Points You Should Know About The Restoration Benefit In Health Insurance

• When does the restoration kick in? 

Restoration triggers when you use up your base sum insured along with bonus (if any), in a policy year. In some policies, it triggers only when the entire sum insured is exhausted, while in some others, even partial exhaustion of the sum insured can initiate Restoration. We’ll learn about this in detail later! 

• For which treatments can you use the restored coverage? 

In some policies, the restoration benefit feature is restricted for ‘unrelated conditions’ only. Meaning - you can claim if the second hospitalization is for a condition that’s not directly related to your first hospitalization. Family floaters might also have a condition that the restored amount can only be used by a different member or for a different disease.

How much restoration? Restoration benefit refills the sum insured up to the base policy cover by a certain% - usually 100%. 

• How many times can the cover be restored? 

The Restoration benefit usually triggers only once a year, except in some plans which offer an unlimited restoration. In either case, the maximum amount you can claim in any hospitalization cannot be more than your base sum insured (and bonus, if any). Also, the restored sum insured expires every year - meaning, once it is triggered, the restored sum insured cannot be carried forward to the next policy year.

• Additional conditions

In some policies, restoration may not be applicable on the first claim you make in a policy year - meaning, you cannot use the restored sum insured for your first hospitalization.

Favorable Conditions In Restoration You Should Look For

• Pay for Related Illness 

In some policies, the Restoration benefit is restricted for ‘unrelated conditions’ only. Meaning - you can claim if the second hospitalization is for a condition that’s not directly related to your first hospitalization. 

This might become a problem in case you suffer from a chronic illness that requires multiple hospitalizations within the same year, and you exhaust your sum insured. As far as possible, you should opt for the restoration feature that covers related and unrelated illnesses so that the restored sum insured can be used for all conditions, treatments, and injuries - and you don’t want to worry about it.

• Trigger On Partial Exhaustion 

In most policies, the restoration/reinstatement triggers only if your base sum insured (and no claim bonus, if any) is completely exhausted. In some policies, however, the restoration triggers partial exhaustion of the base sum insured and bonus (if any) as well. You should opt for the restoration benefit feature only if the restoration is triggered on partial exhaustion of the sum insured and bonus.

Conclusion

While some health insurance plans allow restoration of the sum insured only once during the policy year, there are plans that allow unlimited restorations too. So, as far as possible, choose a plan that allows unlimited reinstatements or refills of the sum insured. This will be helpful if you need to undergo multiple hospitalizations within a single policy year.

Also read - Is health insurance coverage for critical illnesses available?