Recently, a 35-year-old working professional, Vikas, found himself in a great deal of difficulty. He had to undergo a sudden heart surgery that cost him Rs 4 lakh. Even as he was recovering, his wife Reena was diagnosed with Covid, and she needed hospitalisation - the bill for which came around Rs 3 lakh. While their family floater plan had a coverage of only Rs 5 lakh, what helped them get through this difficult time was the financially-sound decision of opting for the unlimited restoration benefit. Owing to this benefit, the exhausted sum assured was replenished, and the family didn’t have to pay any out-of-pocket hospitalisation expenses. Not just this, the family is still financially prepared if any further need for hospitalisation arises during the policy period. 

While the awareness around health insurance has gained significant momentum - especially after the pandemic - there are several benefits to enhance the policyholder’s protection that still remain lesser-known. One of them is the restoration benefit. To put it simply, restoration benefit helps reinstate the original sum insured amount in case it gets used up during the policy term. The feature, which comes at an extra premium, is especially popular among those who opt for family floater plans because it offers to cover multiple hospitalisations.  

Though this benefit comes as an in-built feature in most comprehensive plans, let’s understand how it has evolved in recent times to provide the ultimate layer of protection to the policyholder. 

How The Benefit Works:  

Before getting into the evolution of restoration benefits, it’s essential to understand the basics of how this works. Broadly, there are two types of restoration benefits - complete and partial exhaustion. As the name indicates, the first one gets triggered only when your entire sum insured gets exhausted in a single claim, and the latter allows you to avail of the benefit even if only a part of your sum assured gets exhausted.  

If we talk about Vikas and Reena’s case, if they opt for complete exhaustion, the benefit will not get triggered because the heart surgery only used Rs 4 lakh out of Rs 5 lakh. Here, the partial exhaustion option works better because it will allow them to claim the amount for both times. However, the feature has expanded its coverage to offer utmost protection. 

The pandemic has been harsh for people across the globe, and India is one of the most severely affected countries. Even as the virus continues to mutate and cause recurring waves, it is always advisable to add an extra protection cover. Covid comes with several complications, some of which might not be immediately detected. This is where this benefit comes to the policyholder’s rescue. Here’s how it has evolved to suit the policyholder’s needs - 

• One-time restoration - Earlier, the policyholder had the option of one-time restoration. It essentially meant that the policyholder could claim for one more hospitalisation under restoration benefit after exhausting the sum assured during the policy period. However, this came with the condition that the second case of hospitalisation should not be for the same disease. 
• Unlimited restoration for different members - After this, the benefit extended to offer increased protection. Under this, the sum assured could be replenished an unlimited number of times during the policy year. But the hospitalisation expenses would only be covered if different members needed to be admitted and treated. 
• Unlimited restoration for the same person but different illnesses – Eventually, policyholders were offered the benefit of restoring their sum assured an unlimited number of times even if they claim it for the same person but different illnesses.  
• Unlimited restoration for the same illness for the same person - Further, the restoration benefit became more comprehensive to accommodate an unlimited number of hospitalisations for the same person and the same illness during the policy term. 

Being able to reinstate the sum assured for repeated hospitalisation for same or different illnesses is what stands to offer the ultimate protection to the policyholder. There are several insurers that offer this benefit.  

Exclusions To Watch Out For

While these benefits make your health insurance comprehensive, there are a few exclusions as well that one should know about - 

• Restoration benefit is not like No-claims-bonus and cannot be carried forward even if it is unused during the policy year. 
• Restoration benefit does not get triggered in the first case of hospitalisation, even if the expense exceeds the sum insured. For instance, if you have a coverage of Rs 5 lakh and your first hospitalisation amounts to Rs 7 lakh, you need to bear the extra expense. 
• Don’t see restoration benefit as a replacement of your sum assured. Always opt for a high sum assured. 

The author is the Head of Health Insurance, PolicyBazaar.com, a financial aggregator.

(Disclaimer: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)