Restoration Benefit in Health Insurance

  • Author :
  • TATA AIG Team
  • Published on :
  • 30/12/2023

A majority of insurance policyholders miss out on certain perks and benefits of health insurance due to the complex terminology.

One such term that leads to confusion among health insurance buyers is the restoration benefit. What is it? How does it work? What are its pros and cons?

For starters, it is a health insurance add-on that provides a policyholder with the flexibility to make claims beyond their exhausted sum insured value. Keep reading for a detailed answer!

What is Restoration Benefit in Health Insurance?

Restoration benefit, as the name suggests, is a type of add-on that comes with health insurance. It is a special feature that allows you to restore your sum insured in case it gets exhausted during the policy tenure. Let’s understand this with the help of an example:

Suppose you are hospitalised due to an unforeseen medical emergency, and the total bill comes out to be ₹4 lakhs. Note that your insured sum value is ₹5 lakh.

So, after paying the first-time hospitalisation expenses, your remaining value becomes ₹1 lakh. Now, suppose you need a follow-up treatment for the same during the same year, which incurs a cost of ₹3 lakhs.

In a normal insurance scenario, ₹1 lakh out of ₹3 lakhs will be covered by your insurance. Hence, you need to pay the exceeding ₹2 lakhs out of your pocket.

However, if you have a restoration benefit in your policy, your insurance provider will restore your insured sum to ₹5 lakhs right after you have made your first claim. It means the next claim you will make will be covered using the fully restored amount. In this case, you will not have to pay anything out of your pocket.

Types of Restoration Benefits in Health Insurance

There are mainly two variants of the restoration benefit in health insurance. Let’s discuss both in detail:

Partial Restoration Benefit: Under this benefit, your insurance provider will restore your amount as per your selected sum insured value, even if you use it partially. For example, Suppose your sum insured is ₹10 lakhs.

Now, you undergo surgery worth ₹6 lakhs and make a claim for covering the expenses. While you still have ₹4 lakhs sum insured, the insurance provider will still restore your balance back to ₹10 lakhs.

Full or Complete Restoration Benefit: Under this type of restoration benefit, the insurance provider restores the value of your insured sum only when you exhaust it completely. Taking the above example, your insured sum will only be restored back to ₹10 lakhs if you make a claim of ₹10 lakh and no insured sum is left.

Benefits of Restoration Benefit in Health Insurance

The restoration benefit add-on in health insurance offers several advantages. Some of them are mentioned below:

Higher Financial Security: The primary advantage of restoration benefit is that it significantly increases your financial security. In simple words, even if your sum insured balance is exhausted, you will not have to pay the exceeding amount by yourself.

Not only will your sum insured will be restored, but you will also stay covered against the other unforeseen medical emergencies that may arise during the policy tenure.

Multiple Claims: Another benefit of restoration benefits is that you can make multiple claims during the policy year without worrying about the remaining insured sum. This feature is highly useful for individuals who need frequent hospital visits.

No Need to Purchase Another Plan: With a normal health insurance policy, you have to either pay for your health expenses from your wallet or search for a new plan once your insured sum is over. But when you have a health insurance plan with restoration benefits, you can stay covered for the long run in a cost-effective way.

Higher Satisfaction and Peace of Mind: No need to think twice before getting an important treatment done, as you can stay assured that all your medical expenses will be covered with the restoration benefit, even if they go beyond the insured sum limit.

Who Should Opt for Recovery Benefits in Health Insurance?

Restoration or recovery benefit in health insurance is ideal for the following people:

Policyholders Vulnerable to Health Issues:

If you are someone who needs to make frequent visits to the doctor or hospital and is vulnerable to certain health issues, then health insurance restoration of cover is ideal for you. It will provide you with increased financial security by covering your medical expenses that go beyond your sum insured.

Policyholders with Family Floater Plan

The restoration benefit add-on is also great for policyholders who are planning to buy health insurance plans for the family.

When purchasing a family health insurance policy, most people struggle to decide on an ideal value of the insured sum.

The reason behind this is obvious: you never know which family member may need additional coverage. In this case, buying a health insurance plan with restoration benefits will ensure that all your insured family members are covered regardless of what your insured sum is.

Policyholders with Lower Sum Insured

If your insured sum is lower, then the restoration benefit cover can act like backup insurance. It will offer financial support in case you deplete your insured sum value due to any unforeseen medical event.

Things to Consider When Buying Health Insurance with Restoration Benefit

Restoration benefit in health insurance is a great feature to have. However, there are certain important things which must be kept in mind when opting for this add-on:

Read and Understand Terms and Conditions Carefully

While the purpose of the restoration benefit add-on remains the same for all medical insurance policies, their terms and conditions vary from one insurance provider to another.

While some insurers provide this add-on for any kind of unexpected medical expenses, a few others restrict it to specific illnesses and ailments. So, before investing in a medical insurance plan with the restoration benefit, consider reading and understanding its terms and conditions carefully.

Ensure that the Premium is Within Your Budget

As mentioned several times, restoration benefit is an add-on that comes at an additional cost. Depending on the type of policy, value of the sum insured, and type of restoration benefit, your premiums may increase significantly. So, only opt for this add-on if you can afford to pay slightly higher health insurance premiums.

It is Only Available for Future Medical Expenses

Another crucial thing to keep in mind before buying health insurance with restoration benefits is that it is only triggered for future expenses that may arise during the policy year.

It means you can not claim it for the same expenses. For example, If your insured sum is ₹5 lakhs and you make the first claim of ₹6 lakhs, then you will have to pay the remaining balance of ₹1 lakh by yourself.

You can not claim the restoration benefit at this time. It can only be claimed for future expenses.

You Can Not Carry Forward the Recovery Benefit to Next Year

Another important point to note about the restoration benefit is that you can not carry it forward to the next year. It remains valid only for the policy year. So, even if you don’t use it, it will not be moved to your policy for the next year.

Final Words

Restoration benefit in health insurance is an excellent feature that relieves you from worrying about exhausting your insured sum. While this add-on comes at an additional cost, it is totally worth it for the multiple benefits it provides.

Not only does it prevent you from paying your extra healthcare expenses from your side, but it also helps you get the required medical attention without worrying about the funds.

This article has outlined everything you need to know about recovery benefits in health insurance, including the answer to who should invest in it.

We hope it helps you buy the right health insurance!


Are restoration and recharge benefits the same in a medical insurance plan?

Both restoration and recharge benefits play a similar role in health insurance. However, they are used for different purposes. A recharge benefit is used to add an additional sum insured, whereas the restoration benefit lets you restore the decided sum insured once it is fully or partially exhausted.

How can I check if my medical insurance policy has a restoration benefit or not?

To check whether or not your health insurance policy has a restoration benefit, consider reading your policy documents. In most cases, it is mentioned on the policy papers and made clear by the insurance provider at the time of purchasing a policy. However, if you are unsure, you can always reach out to your insurance company for confirmation on the same.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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