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Restoration Benefit in Health Insurance

Health insurance is essential to meet the expensive treatment costs in case of medical emergencies and focus on recovery rather than on arranging for finances. Sometimes, even though they have a health policy backup, individuals face the issue of depleting the sum assured due to claims. ...Read More

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Restoration Benefit in Health Insurance

What is Restoration Benefit in Health

Restoration Benefit in Health Insurance
April 10, 2025

Table of Content

 

The restoration benefits in health insurance reload the sum assured if it is used up entirely after a claim. This benefit is available in both individual and family floater health insurance plans. You can opt for the restoration facility as an add-on to your base plan. This will come in handy wherever second hospitalisation coverage is required.  

For instance, you have a health insurance policy for Rs. 10,00,000/- and use up the entire amount. The health insurance restoration facility will refill the sum assured in the same policy year, and you can avail yourself of further medical treatment, if required, without financial stress.

Benefits of Having a Health Insurance Plan with Restoration Benefit

After learning about the restoration of cover in health insurance meaning, you should also know the benefits of having an insurance plan with restoration benefits. They are:

  • Better Financial Coverage

    • The coverage restoration facility automatically reloads the sum assured if you have claimed the entire primary amount in that year. This feature safeguards you against unexpected medical expenses that arise during a financial year.

  • Claim More Than Once

    • If you have multiple ailments and need frequent hospitalisation, with the add-on cover for restoration, you can submit any number of claims in a financial year. A refill happens automatically whenever the primary sum assured is consumed in full.

  • Budget-Friendly

    • Though the premiums are much higher than standard policies, the restoration facility provides extended health insurance benefits. You comprehend the benefit of the reloading facility in the long run when you get further protection against medical costs within the same plan.

  • Peace of mind

    • The restoration benefits in health insurance give you peace of mind that all your medical expenses are taken care of, and you need not stress about arranging for funds during a medical emergency.

How Does Restoring Your Sum Insured Benefit You?

If you have multiple health issues and you might have to submit claims several times, the restoration benefits in health insurance give you peace of mind that you have protection against medical emergencies throughout the policy year. Family floater restoration is a good option where all the family members have coverage under a single plan. The restoration benefit, however, cannot be carried over to the succeeding year. It applies only to the remaining policy term.

Who Should Choose a Restoration Benefit?

With the awareness about what is restoration benefit in health insurance, you should also be able to decide if you require it before purchasing a plan. Not everyone will need a restoration benefit. The following individuals should choose the benefit for future claims protection:

  • Individuals with numerous health issues.
  • Those who require frequent medical treatment and need additional protection.
  • The ones who prefer flexibility in making claims.
  • Persons with health insurance for family where all the family members share the sum assured. If the sum assured is exhausted by one family members the others remain covered.

Types of Restoration Benefit

Learning about what is restoration benefit in health insurance is not adequate. You should have comprehensive knowledge of the facility including the types of restoration benefits.

  • Complete Exhaustion

    • Under complete exhaustion, the insurance company restores a sum equivalent to the primary sum assured. However, this reloading happens only when the primary sum assured is exhausted. For example, the sum assured is Rs. 10.00 lakhs and you use up the entire amount for the first hospitalisation during the policy year. If you are hospitalised a second time in the same policy year, the insurance company refills the coverage up to Rs. 10.00 lakhs. In this case, the total coverage provided is Rs. 20.00 lakhs.

  • Partial Exhaustion

    • This restoration benefits in health insurance suits those who prefer restoration without exhausting the base sum assured. Under this option, the coverage is restored up to a pre-decided amount every time you file a claim. For instance, you opt for a restoration of Rs. 3.00 lakhs for a health insurance policy with Rs. Rs. 8.00 lakhs coverage. If you claim medical expenses of Rs. 5.00 lakhs in a policy year, an additional sum insured of Rs. 3.00 lakhs is reloaded automatically. The coverage for the policy year will be Rs. 11.00 lakhs in this case and not Rs. 16.00 lakhs, unlike in complete restoration. The advantage is you need not use up Rs. 8.00 lakhs to avail yourself of the restoration facility.

Under this context, you should know what built-in vs add-on restoration. Complete restoration is an add-on facility where a sum equivalent to the primary sum amount whereas built-in facility is the partial exhaustion facility where the coverage is recharged up to a pre-decided amount.

Key Features of Restoration Benefits in Health Insurance

The benefits of health insurance with restoration are:

  • Applies to Future Claims

    • The insurance company offers restoration coverage facility only if the primary sum assured finishes in a policy year. If you use the primary sum assured partially, the restoration benefit is not activated.

  • Activates Only Once Per Policy Year

    • The sum assured is restored only once in a policy year. This facility enables usage of the facility for extended coverage to protect medical emergencies without additional costs.

  • Cannot Be Carried Forward to the Next Year

    • Restoration benefits in health insurance are extended for the same policy year. If you do not utilise the facility in a policy year it cannot be carried forward to the next year. The reinstatement is a safety net for emergencies that arise in a policy year and is not an avenue to accumulate coverage for future years.

  • Can Be Added as an Extra Feature

    • In addition to add-ons such as critical illness insurance, restoration benefits in health insurance can be added to the base plan for an extra premium for restoration which is affordable. This provision enables the customisation of MediClaim policies as per the policyholder’s requirements.

Key Factors to Consider Before Choosing a Restoration Benefit in Health Insurance

Comprehending the key factors after knowing what is restoration of cover in health insurance meaning before purchasing a plan is crucial for an informed decision.

  • Eligibility Criteria

    • Restoration benefits in health insurance can have some exclusions. Read the policy document carefully to understand if the facility is available for multiple claims for the same illness or is provided only for unlinked claims.

  • Coverage for the Same Disease

    • Generally, the restoration benefit is provided for a health issue only for unlinked health issues within a policy year.  Make sure the insurer provides flexibility in this regard before choosing the facility. Otherwise, the add-on will be futile if you do not have multiple health issues.

  • Type of Health Insurance Plan

    • If you have a family floater plan, make sure that the facility is available for all the insured members. Also, ascertain the replenishing facility provides ample coverage for repeated claims in a policy year.

  • Cost of Premiums

    • Restoration benefits in health insurance attract an extra premium. While the provision enhances the coverage, the additional cost should be affordable.  Compare various plans for the best deal.

  • Limit on Restorations Allowed

    • Some health insurance plans provide unlimited restoration benefit whereas some restrict the facility to once in a policy year. Check this aspect before confirming the purchase.

  • Nature of Claims

    • Check the nature of medical expenses that are restored. It may be only for hospitalisation expenses or even for day-care procedures and other medical costs.

  • Cannot Be Carried Forward

    • The restoration facility should normally be used in the same year. It cannot be carried over to the next policy year. Be mindful of this when deciding on a health insurance plan.

  • Waiting Time and Limitations

    • The restoration benefit might be activated after a waiting period and may have limitations. Ensure that the facility is available from the first policy year and check for the exclusion.

Does Restoration Benefit Make Your Policy More Expensive?

Restoration benefits in health insurance are generally provided as an add-on benefit. For the additional coverage over and above the primary sum assured you will have to pay an extra premium. Before worrying about whether the benefit makes your policy more expensive or not, you should consider the long-term benefit you derive from the plan.

The insurance company considers the age, current health condition, medical history, plan type, and the primary sum assured to determine the premium for the additional coverage.

How to Purchase a Restoration Benefit Plan?

You should also know how to purchase a restoration benefit plan besides understanding the restoration of health cover in insurance meaning and other relative aspects. You should be mindful of the following while opting for the facility:

  • Important Conditions to Know About Restoration Benefit

    • If the restoration benefit is not made use of in a policy year, it cannot be carried over to the next financial year. Policy renewal with restoration is restricted to the same policy year.

    Even if the entire sum assured is utilised in a single claim, the primary sum assured will be restored and can be used for future claims in the same policy year.

    The sum assured does not matter for the restoration benefit. It is available for plans with smaller sums assured also.

    The restoration benefit in health insurance is ideal for individuals with a family floater plan. Even if the primary sum assured is utilised, the family members can still have coverage.

    The restoration benefit is available for only one individual at a time.

  • Be Prepared for Future Medical Emergencies

    • A health insurance plan with restoration benefits is recommended if you wish to have maximum coverage for a lower premium. In some plans, the benefit is incorporated in the base plan whereas in some plans it is offered as an add-on. If you avail it as an add-on you will be charged an extra premium that depends on your age, medical history, current health condition, and plan type.

    The restoration benefit activates for an unlinked medical condition. Also, the claims for 2 members in a family should be at different time intervals to avail of the benefit.

    In some health plans, you can avail of the restoration benefit for the same illness in a policy year.  However 2 members of the same family can use the benefit for the same illness.

    In some plans, the restoration benefit is available for the same illness if the claim is made within a gap of 30 to 45 days. An additional premium is charged for the facility.

Summary

Restoration benefits in health insurance automatically refill the sum assured when the primary amount is depleted. This feature provides additional protection against medical emergencies. It is ideal for individuals with chronic illnesses and family floater plans. Similarly, life insurance policies with increasing sum assured, waiver of premium, or periodic payouts ensure continued financial stability for your loved ones. Choosing the right combination of health and life insurance ensures complete financial security for you and your family in times of need.

FAQs on Restoration Benefits in Health Insurance

Q. What are the restoration benefits of health insurance?

The restoration benefits in health insurance is a feature wherein the coverage is reset to the original limit once it is used due to a claim. The restoration is applicable to the same policy year and cannot be carried forward to the succeeding year. 

Q. What is the restoration clause in insurance?

As per the restoration clause in insurance the sum assured is replenished to the maximum limit if it is exhausted due to a claim. The facility is available for both individual and family floater plans. 

Q. What is the period of restoration?

The restoration period is the duration in a policy year when the sum assured is reset to the original coverage when entirely utilised. It provides financial security for fresh claims for unrelated health issues within a policy year. 

Q. Can two members of the family suffering from the same disease claim restoration benefits?

Yes. Two members of the same family can get the restoration benefit for the same disease.

Q. Can you avail yourself of restoration benefits in health insurance in the same claim?

No. You cannot avail yourself of the restoration benefit for the same claim. It gets activated for a new claim for an unrelated medical condition.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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1. Annual Premium amount ₹ 1869 for Male aged 35 years, Base Benefit, 10 years term, Regular Pay option, Sum Assured=10 lakhs, excluding Taxes & levies as applicable.

ARN - ED/04/25/22820