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All you need to know about Sum Insured Restoration in a health insurance plan

What happens if your medical costs for a year run over the Sum Insured by your policy?

The entire purpose of having a health insurance policy is to protect yourself financially during a health crisis. But what happens if your medical costs for a year run over the Sum Insured (SI) by your policy? What happens if there are more than one health concern in your family and your claim gets exhausted? Well, it is to counter these uncertainties that insurance companies offer sum restoration as a benefit to the policyholders and here’s everything you need to know about it.

1) What is Sum Insured Restoration Benefit?

Sum restoration means that if you exhaust the cover provided by your policy through claims, then the insurer will make available (or restore) the amount again, in the same policy year, for you to use again. 

But there are different kinds of sum restoration benefits (depending on your insurer) and different conditions of their use. As we will see ahead:

2) What are the different restoration benefits?

  1. Partial exhaustion of the SI – This benefit restores your sum insured even if a partial amount has been used in claims. For example, for a sum insured of 5 lakh, if you made a claim of a partial sum (say 3 lakh) then that amount will be restored and your total cover of 5 lakh will remain intact. 
  2. Complete Exhaustion of the SI – This kind of benefit kicks in when the entire SI gets exhausted. For example, for an SI of 5 lakh, if you made a claim of 3 lakh, the entire sum will not be restored until the remaining 2 lakh of the cover is not exhausted. So, the sum will be restored only after the sum total of your claims exceeds 5 lakh. Most insurers offer this kind of benefit to the policyholders.

3) What are the important conditions applicable?

  1. Restoration benefits are NOT available for the same illness – The SI will not get restored for the same illness. For example, if a person has cancer and has exhausted his insurance cover due to chemotherapy, then the sum will not be restored for the treatment of cancer. However, the sum will be restored and can be used for any other illness.
  2. Restoration available for family members – The SI restoration can be used by other family members who are insured under the policy. For example, a person has made a claim for certain surgery and exhausted the SI. Now, suppose his wife gets ill and has to be hospitalised. The sum will get restored, under the family floater plan, for her benefit. The same person can also claim benefits again, but just not for the same illness, as mentioned in the point above.
  3. Restoration may or may not be available for first claim – This depends on your policy. Some insurers do not provide for restoration if you exhaust your cover in the very first claim, while others provide restoration after first claims also. You will need to go through your policy to understand what your insurer has on offer.
  4. Restoration benefits lapse in a policy year – The exhaustion of cover and SI restoration is only valid on a year to year basis. What it means is that if you exhaust your cover (say 5 lakh) in a year and your insurer restores the amount to your policy, the amount will only be available to use for the same policy year. You will not have a SI of 10 lakh next year due to sum restoration. The next policy year will revert to same cover.

4) How does it impact the premiums and how can it be bought?

The simple principle of insurance is that the more benefits it offers, the higher the premium will be. But, most insurers, currently, provide this benefit as an in-built benefit and its cost is included in your premium. Also, you can buy SI restoration as an add-on too. What it means is that if your insurer does not provide restoration as an in-built benefit, you can purchase this benefit at slight extra cost. 

SI restoration is a highly useful benefit to have in a health policy and one should always opt for policies with high SI restoration benefits. The medical costs of the future cannot be predicted and hence, it’s always best to have a safety net in place for difficult times.

Photo by Jonas Kakaroto on Unsplash.

OneAssure is a distribution platform that helps you make right decisions on matters where health and finances converge. Visit oneassure.in to know more about your health insurance choices.

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