How Restoration Benefit works?
If I have A health Insurance with base plan of 5 lakh and medical bill incurred is 8 lakh how restoration benefit will work and is there A need for a topup. In another scenario, again person gets medical bill of 4 lakh in same year for same disease, so how the things will play out
The concept of Restoration benefits differ across the insurance companies and can be briefly explained below.
1) Restoration of Sum Insured will trigger upon complete or partial exhaustion of Sum Insured + Cumulative Bonus, if any.
1).a) This benefit can be availed for illness/disease for which claim was already made.
1).b) This benefit can be availed only for illness/disease unrelated to illness/disease for which claim was already made.
2) Restoration of Sum Insured will trigger upon complete exhaustion of Sum Insured + Cumulative Bonus, if any.
2).a) This benefit can be availed for illness/disease for which claim was already made.
2).b) This benefit can be availed only for illness/disease unrelated to illness/disease for which claim was already made.
- Scenario : S.I is Rs.5,00,000/-, Cancer Surgery claim Rs.4,00,000/- of Mr.A
1) Balance Sum Insured will be 1 lakh + 5 lakh = 6 Lakh
2) Balance Sum Insured will be 1 lakh and restore S.I will trigger only after 1 lakh is exhausted
1 & 2) a) Can claim for cancer surgery next time by any insured including Mr. A under the restored S.I
1 & 2) b) Can't claim for cancer surgery by Mr. A under restored S.I but can claim for any other illnesses. However other
insured can claim for cancer & other ailment provided illness/disease unrelated to illness/disease for which claim
was already made by them.
Policy condition must be read before availing benefit under restoration benefit since certain expense are not covered for instance
Star health comprehensive policy states restore benefit is not available for expense incurred under OPD treatment, Delivery & New born baby cover, Organ donor expenses, Health checkup expense, Bariatric Surgery, AYUSH treatment, Accidental death & PTD & Modern treatment.
I have a problem with the restoration benefit.
My total insured value= Basic (10lakh)+ No-Claim Bonus (2.5L)+Recharge Benefit(1.5L)
Amount claimed before this claim was made: 13,60,462
Claimed Amount: 1.5 Lakh. (This is for a unrelated problem- Gall Bladder surgery. Prior Claims were made on Covid for the same patient)
Now Star has only paid me: 39,538. The reason mentioned was that Restoration will only be kicked in post exhaustion of all 14Lakh and so the remaining cant be claimed.
Now as per the policy documentation:
Automatic Restoration of Basic Sum Insured (Applicable for A to I, K, Q): There shall be automatic restoration of the Basic Sum Insured immediately upon exhaustion of the limit of coverage, which has been defined, during the policy period.
Limit of Coverage Definition as per policy:
Limit of Coverage means Basic Sum Insured plus the No Claim Bonus earned wherever applicable.
This does not talk about the recharge benefit.
Please help me if the insurer is correct in not paying the balance amount?
Let's break your question into multiple parts for easier understanding:
- Will restoration benefit work in the first claim?:
Every plan has its own version of the restoration benefit. So the answer to this question will differ based on the plan. In the best-case scenario, where insurers are restoring even for partial exhaustion - the maximum claim payable for every hospitalization is capped to the base sum insured + bonus. Basically, in such policies, you can make an unlimited number of claims, provided the claim amount is lower than the sum insured + bonus. This is generic advice, like I said - you need to go through the terms and conditions of the policy you are considering or hold with your financial advisor.
- Is there a need for topup insurance in cases where my policy already has a restoration option?
Yes, restoration has too many ifs and buts, an example is explained above. It's better to hold a clean adequate cover through super topup than depend on such condition heavy benefits. I would not recommend even considering NCB, as it can be reversed in situations when there are multiple claims over multiple years. The idea of insurance is to have peace of mind - hence we recommend having the simplest, most adequate coverage possible, instead of depending on frills (which can even be withdrawn, by the way by insurers)