HEALTH INSURANCE FOR CHRONIC ILLNESS: Get a plan with restoration benefits - The Financial Express

Individuals are increasingly opting for health insurance policies with restoration benefits as the sum insured in a standard health plan can get exhausted in a single hospitalisation due to spiralling costs of treatment. Such a policy restores the sum insured amount once it is exhausted during a policy year and offers additional coverage for future expenses.

The benefits include extended coverage and financial protection against medical costs. It is helpful for those suffering from chronic illnesses that require long-term medical treatment. The restoration benefit works well in case of a family floater plan as the entire sum insured is shared by all the members in the family.

The cost of policies with restoration benefits vary based on factors such as the insurance provider, the specific plan, the sum insured, the age and health condition of the insured. Policies with restoration benefits tend to have higher premiums compared to standard health plans.

Benefits of restoration

Health insurers offer unlimited restoration benefit plans and partial exhaustion benefits. In unlimited restoration, the sum insured is replenished multiple times during the policy year, and in plans with limited restoration, a predetermined amount for restoration. Another popular feature offered is the restoration for the same illness.

However, the benefit does not work in the case of first hospitalisation. For example, in a policy with sum insured of `5 lakh with unlimited restoration, if the bills on the first hospitalisation come to Rs 10 lakh, then the policy will only cover `5 lakh which is the basic sum insured.

"One should opt for a plan that provides restoration benefits even in case of the same illness as it can be useful for critical illness treatments," says Chirag Nihalani, general manager, Insurance Samadhan.

What to keep in mind

Check the terms and conditions on the restoration of the sum insured for related as well as non-related illness for the same cover, before deciding on the restoration benefit. Note that two or more members of the family suffering from the same disease can claim restoration benefit.

The insured must determine whether the restoration benefit is automatic or optional. "Automatic restoration can be convenient as it activates without any action required from the policyholder. On the other hand, optional restoration allows you to control when the benefit is activated, but it may involve an additional premium depending on the policy," says Pankaj Goenka, assistant vice president & head, B2B Business, InsuranceDekho.

Do check if there are any limitations on the number of times restoration can be availed in a policy year or over the lifetime of the policy. Also, check if it expires at the end of the policy year or if any unused restoration amount can be carried forward.

Restoration or top-up

While restoration provides maximum up to the basic sum insured, a top-up can cover medical expenses even up to 20 times of the base sum insured. Also, top-up can contribute even in the first hospitalisation.

Rakesh Goyal, director Probus Insurance Broker, says policies with restoration benefits may have slightly higher premiums compared to basic health insurance plans. "However, opting for a top-up plan alongside a basic health policy could be cost-effective as it offers additional coverage at a lower cost," he says.