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Should you go for restoration benefit in a health insurance policy?

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NEW DELHI: With the fresh spike in covid-19 cases and the rising healthcare costs, there is an increased demand in the country for health insurance policies with higher sum insured. While there are a number of policies available that offer high sum insured, there is an option available under health insurance policies that restores the cover if you consume the entire amount in a year.

Restoration benefit is wherein the insurance company restores the original sum insured after it gets fully exhausted for the treatment of the illnesses.

“Covid-19 cases are rising again, and it can hit anybody any time and it is important to have an adequate sum insured in place. We have seen covid-19 claims go up to 15-20 lakh. In case of customers having lower sum insured policies, one should port their policy to high sum insured. We are also seeing an uptick of 150% people porting their lower sum insured policies to the higher sum insured policies,” said Amit Chhabra, head-health Insurance, Policybazaar.com.

Buying a restoration plan along with your base health policy enhances health insurance cover. Under this plan, the entire sum insured gets restored in a policy year when it gets exhausted due to hospitalisation and other healthcare expenses.

“This is especially useful for family floater policies, where one sum insured is shared by multiple members of the family. In case one of the members undergoes hospitalisation, which drains out the entire sum insured, it might leave the other members unprotected. In such a time, having a restoration benefit can be beneficial, as your insurance company will immediately restore the entire sum insured and it can be claimed again, for any unrelated diseases for the same member, or by the other members of the family,” said Dr. Sudha Reddy, head, health and travel, Digit Insurance.

Remember that choosing the restoration benefit can increase the premium price of the policy.

There are two types of restoration options. First is complete exhaustion of cover, where the benefit will come into play only when the entire sum insured is exhausted and the second is partial exhaustion, wherein the benefit will come into force even with partial exhaustion of the sum insured.

However, there are conditions attached to it. “Restoration benefit is available only for different illnesses and not for the same illness or injury in a policy term. Restoration benefits exist only for future claims, it is never applicable on the first claim made in a policy year,” said Chhabra.

(Do you have a personal finance query? Send in your queries at [email protected] and get them answered by industry experts.

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