Page 45 - Insurance Times August 2020

How the

'restoration

benefit' policy

works

M ost health insurance policies in the market benefit will not be triggered as Joe has not exhausted his SI

offer built-in backup plans for policyholders in
completely. However, if Joe makes a third claim in a year,
the form of ‘restoration’ benefit. In this
he will have Rs. 5 lakh as his SI. There are health covers in
feature, the insurer fully reinstates the
Max Bupa’s Go Active policy and Lifeline by Royal Sundaram
original sum insured (SI) once it is exhausted. the market such as Optima Restore from HDFC Ergo Health,
This means, in a floater policy, if any other family member General Insurance that offer to reinstate the original SI even
gets hospitalised even after the entire sum insured (SI) is when the SI is partially exhausted.
used up in a policy year, there will still be a cover available
to the extent of the full SI. This reinstatement of health For instance, let’s assume Joe has a health policy of Rs. 5
cover is welcome, especially if your original cover is small. lakh and he makes a claim for Rs. 3 lakh (first claim). The
Restoration feature is also termed as refill, reset or reload insurer settles the claim and Joe’s SI balance is Rs. 2 lakh.
depending on the insurer. His ‘restore’ benefit is triggered (available only for
subsequent claims) and his SI balance for the year will be
However, restoration benefits come with caveats and Rs. 7 lakh (existing balance of Rs. 2 lakh and SI restored is
limitations. Here is what you should know. Rs. 5 lakh). What must be kept in mind is that a single claim
in a policy year cannot exceed base SI. Which means, if Joe
The basics makes a second claim for Rs. 6 lakh, the insurer will pay Rs.
5 lakh only and the balance Rs. 2 lakh SI will be available for
While health insurers offer to reinstate your original SI, the
subsequent claims.
restoration process varies with insurers. Some policies such
as Manipal Cigna’s ProHealth policy, Activ Assure Diamond
policy from Aditya Birla Health, ICICI Lombard’s iHealth Plus Note that, while most policies come with ‘restore’ benefit,
it may be not available across all Scan & Share variants of a
restore your original SI only after the existing cover is
particular policy. For instance, in ICICI Lombard’s iHealth
exhausted.
Plus, the ‘reset’ benefit is available from SI of Rs. 3 lakh and
above only. Similarly, in Digit Insurance’s health plan, the
Let’s understand this concept with an example. Joe has Rs.
5 lakh as health cover and, on his first claim, this amount ‘restore’ benefit is available for comfort variant of the plan
gets utilised. A few months later, he gets hospitalised for only.
another illness, and his second claim is for Rs. 2 lakh. Given
that his original SI is exhausted, his restored SI will be Rs. 5 What’s the catch?

lakh and the insurer will settle his claim (of Rs. 2 lakh). Since most insurers offer ‘restore’ or ‘ refill’ benefit as an
inbuilt feature in the policies, there are certain points that
Now, let’s take another case. Joe’s first claim is for Rs. 4 lakh; you as a policyholder should keep in mind.
the balance SI will be Rs. 1 lakh. He makes a second claim
for Rs. 2 lakh. The insurer will cover only Rs. 1 lakh and Joe One, ‘restore’ benefit is usually available only once during a
will have to settle the balance from his pocket. The ‘restore’ policy year when insurers refill 100 per cent of the base SI.

The Insurance Times, August 2020 45