Author: Sidharth Hampanavar

Health insurance plans have become quite innovative in recent times as they are providing better and more inclusive coverage benefits. They are increasing the scope of coverage so that they can cover all possible types of medical expenses and the policyholders can enjoy complete coverage. One such coverage benefit, which is available in many health insurance plans, is the restoration of the sum insured. Let’s understand what this coverage benefit is all about –

What is the restore benefit in health insurance?

Restore benefit in health insurance is a coverage benefit which restores or refills the sum insured if it is exhausted on a previous claim. If in a policy year, you make a claim in your health insurance policy and use up the sum insured, the sum insured would be restored through the restore benefit so that in case of future claims the medical costs can be covered under the policy. For instance, if the policy has a sum insured of INR 5 lakhs and the coverage is used upon a claim, if there is another claim within the same policy year, the restoration benefit would restore the sum insured back to INR 5 lakhs. Thereafter, the restored sum insured can be used to meet subsequent claims which occur within the same policy year.

What are the types of restore benefit in health insurance?

Restore benefits in health insurance can come in two types. They are as follows –

1. Restoration on complete exhaustion of sum insured 

   If the health insurance policy provides a restore benefit in case of complete exhaustion of the sum insured, the restore benefit would work only if the sum insured is exhausted. If it is not, the restore benefit would not be applicable. For instance, say a health plan has a sum insured of INR 5 lakhs and a claim of INR 4 lakhs is made. After the claim is paid, the remaining sum insured is INR 1 lakh. If there is any further claim of INR 2 lakhs within the policy year, the restore benefit would not be applicable. INR 1 lakh would be paid by the remaining sum insured and the remaining INR 1 lakh would have to be paid by the policyholder.

2. Restoration on partial exhaustion of sum insured

   In a health insurance policy providing restore benefit on partial exhaustion of sum insured, there would be no need for the sum insured to be fully exhausted for the restore benefit to apply. The sum insured would be restored for future claims. For instance, in the above example, after the claim of INR 4 lakhs, INR 1 lakh sum insured would be left. The restore benefit would apply and the sum insured would be restored to INR 5 lakhs. For the future claim of INR 2 lakhs, the sum insured would be available to pay off the claim.

Benefits of restore benefit in sum insured

The restore benefit in health insurance is quite beneficial as it provides additional coverage. Here are some of the benefits of restore benefit –

1. Restore benefit increases the coverage available in your health insurance policy. You can enjoy additional sum insured under the policy through restore benefit
2. Many health insurance plans have an inbuilt restore benefit under the policy’s coverage benefits. Therefore, you are not required to pay an additional premium for availing the coverage
3. The restore benefit ensures that your health insurance policy would not fall short in meeting your health insurance claims
4. If you have a family floater health plan, the restore benefit is very beneficial. In such policies, the restore benefit ensures that the sum insured sufficiently covers all the members of your family. If the sum insured is used up by one member, the restored sum insured would ensure that the plan covers the medical expenses of another member if required.

Who should opt to restore benefit in health insurance?

Restore benefit is universally beneficial for all health insurance policyholders. It becomes especially relevant when you are buying a family floater policy to ensure optimal coverage for all members of the family. You can even opt for this coverage in case of individual health insurance plans for higher coverage. Moreover, if you have an existing illness and/or you are prone to illnesses and/or accidents, you should opt for the restore benefit so that in case of frequent claims, your sum insured would not fall short in covering your medical expenses.

Things to keep in mind about restore benefit in health insurance

Here are some important aspects of the sum insured restoration benefit which you should keep in mind if you are opting for this coverage benefit in your health insurance plan –

1. Availability 

   Under many health insurance plans, sum insured restoration features are inbuilt in the scope of coverage. It forms a part of the coverage benefits of the policy and you don’t have to opt for the coverage separately. However, under some health insurance plans, restoration benefit is available as an optional add-on. You are required to opt for this benefit by paying an additional coverage. So, when buying health insurance check out whether the restore benefit is inbuilt or optional.

2. Cost 

   Health insurance plans which have the restore benefit in their coverage features would cost more than plans which don’t. So, if you are buying a health plan with restore benefit, the premiums would be higher compared to a plan without restore benefit. The actual cost of the benefit depends on the insurance company and it is not very high.

3. Extent of restoration

   This is another important condition which you should check if your health plan has restored benefit. Under many plans, the restore benefit restores 100% of the base sum insured. Under some plans, however, restoration is allowed for up to 50% of the sum insured only. Additionally, there are plans which allow the sum insured to be restored by 200% through the accelerated restoration feature which is available as an add-on. For instance, if the sum insured is INR 5 lakhs and the restore benefit restores 100% of the sum insured, the sum insured would be restored by INR 5 lakhs upon exhaustion. In the case of 50% restore benefit, the restoration would be by INR 2.5 lakhs and in the case of 200%, the restoration would be by INR 10 lakhs. So, while the first plan would give you total coverage of INR 10 lakhs, the second one would give coverage of INR 7.5 lakhs and the third one INR 15 lakhs.

4. Application of restoration 

   There are some terms and conditions based on which the restore benefit applies. These include the following –

   • The restore benefit is not applicable to the first claim in a policy year. It becomes applicable to claims subsequent to the first claim. So, if you have a health plan of INR 5 lakhs and your first claim is INR 5.5 lakhs, the restore benefit would not give you an additional sum insured. In that case, you would have to pay INR 50,000 from your pockets. Thereafter, for any subsequent claim, the restore benefit would restore the sum insured and you would get a cover of INR 5 lakhs
   • Under many plans, the restore benefit might work only once in a policy year. Once it is used, it becomes invalid even if there are multiple claims thereafter. However, in some plans, the restore benefit can work a multiple number of times within the same policy year.
   • The restore benefit is allowed on unrelated illnesses. This means that the subsequent claim in the policy should be for a different illness or injury than the first wherein the sum insured was used up. If the subsequent claim is for the same illness or injury, the restore benefit might not apply.
5. Carry forward of the benefit

   If you do not use the restore benefit feature of your health insurance plan, it cannot be carried forward to the next policy year. 

The sum insured restoration benefit has become a common coverage feature of many new-age health insurance policies. It proves beneficial as it allows sufficient coverage in case of multiple claims. So, look for health plans with the restoration benefit feature for optimal coverage.

Frequently Asked Questions

1. What is the coverage duration of restore benefit?

   The restore benefit has the same coverage duration as that of the main policy. If the benefit is inbuilt in the coverage features, it would continue every year that the policy is renewed. If, however, you have opted for the benefit as an add-on, you would have to opt for the add-on every time the policy is renewed to enjoy continued coverage lifelong.

2. In a family floater health plan, one member makes a claim for heart attack and exhausts the sum insured. Would the restore benefit work if another member suffers a heart attack and makes a claim?

   The restore benefit works on subsequent claims and not on the first claim. Thus, if one member has made a first claim under the policy, the second member can make a subsequent claim under the policy and the restore benefit would work. Even if the claim is made for the same illness, the restore benefit would work provided that the second member makes a claim after the first claim has been made and settled.

3. My existing policy does not offer restore benefit. How can I avail coverage for restore benefit?

   You can buy an additional health insurance policy with restore benefit to get coverage for restore benefit if your existing plan does not offer such coverage. Alternatively, you can switch your current health insurance policy to another health insurance policy which offers coverage for restore benefit. This switching is called porting and this is available at the time of renewals.

4. Is the no claim bonus taken into consideration when restore benefit is applied?

   Yes, the no claim bonus is taken into consideration when restore benefit is applied. The restore benefit is applicable when the sum insured and the no claim bonus thereon is used upon a previous claim.

5. I suffer an accident and use up the sum insured in the first instance of a claim. Thereafter, I am hospitalised for an appendectomy. Would the restore benefit apply?

   Yes, the restore benefit would apply since the subsequent claim is for an unrelated illness. Your sum insured would be restored and the health insurance policy would cover the cost of appendectomy.

The Insurance Regulatory and Development Authority of India (IRDAII) continuously proposes changes in health insurance plans. These changes serve two purposes – 

• They help health insurance policies to adapt with the changing times
• They make health insurance plans more customer-friendly 

When COVID struck, IRDAI issued a series of guidelines to insurance companies to make COVID related claims as hassle-free as possible. Now, when health insurance plans have been offering complete help for COVID, IRDAI has proposed a series of new changes which would make health insurance plans more customer friendly. These changes should be incorporated by health insurance companies in the policies that they offer from October 2020. Let’s have a look at what these changes are –

Change#1 – Standardization of policy clauses

Insurance plans are technical in nature and the clauses mentioned in the policy document might prove confusing for many. Keeping this view in mind, IRDAI has asked health insurance companies to make their policy clauses standardized so that customers can understand them easily. These policies clauses should be stated in the wordings as provided by the IRDAI across all insurance companies.

What it means for you?

As policy clauses are standardized, they would become uniform across all health insurance plans. You would, therefore, be able to compare different plans easily without wondering if the plan that you choose has some hidden clauses which you should know. So, policy clauses like disclosure of important facts, grace period, health insurance portability, renewal, grievance redressal, policy cancellation, etc. would have the same definition across all health insurance plans. This would help you understand the policy better and compare different plans on their clauses easily.

Change#2 – Coverage for Telemedicine

Telemedicine means getting medical assistance from a distance using different modes of telecommunication. Under telemedicine, the doctor and the patient do not meet physically. Instead, they meet virtually. The concept of telemedicine gained popularity with the Coronavirus pandemic when visiting doctors and clinics for medical assistance became challenging due to lockdowns and social distancing norms. In today’s developing times, telemedicine has become a popular mode of availing medical assistance. With this development, IRDAI has also proposed that health insurance plans should cover the cost of telemedicine if the health plan provides coverage for normal consultations.

What it means for you?

The inclusion of telemedicine in your health insurance policy would increase the scope of coverage of the policy. It would eliminate your out-of-pocket expenses on telemedicine as the policy would cover such costs thereby making the health plan comprehensive and suitable for the current COVID crisis.

Change# 3 – To make proportionate deductions on room rent sub-limits more reasonable

The concept of proportionate deduction is applicable in case of room rent limits. If a health insurance plan has sub-limits on room rent, you are expected to choose a hospital room within the specified sub-limit for getting complete coverage under the policy. However, if you choose a room whose rent is higher than the prescribed limit, the total cost incurred on inpatient hospitalisation is reduced by the percentage by which the actual room rent exceeds the covered room rent.

For example, suppose the room rent sub-limit in your health insurance policy is Rs.4000. On hospitalisation, you choose a room with a rent of Rs.6000. This rent is 50% higher than the covered room rent. Thus, in this case, your inpatient hospitalisation bills would be reduced by 50% to calculate the admissible claim amount. This bill would include your room rent, doctor’s fee, surgeon’s fee, anaesthetist’s fee, cost of medical devices, medicines, etc. which are called ‘associate medical expenses’. So, if your bill amounts to Rs.2 lakhs, the insurance company would pay only Rs.1 lakh.

IRDAI has specified changes in this regard. It has asked insurance companies to define the meaning of ‘associate medical expenses’ clearly in their health insurance plans. The expenses, those fall under ‘associate medical expenses’ should be clearly stated in the policy. Moreover, IRDAI has asked insurance companies to exclude the following costs from the list of ‘associate medical expenses’ – 

• Diagnostics 
• Medical devices and implants used in the treatment
• Consumables
• Pharmacy

IRDAI has also asked insurers to remove proportionate deduction in case of hospitals which do not have different pricing policies for different categories of rooms and also for ICU admissions.

What is means for you?

This change is meaningful if you have room rent limits in your existing plan or you would buy a policy with such sub-limits. With the expenses clearly listed under ‘associate medical expenses’ you can easily understand which expenses would be impacted by the proportionate deduction in case the room rent limit is exceeded. Moreover, with the afore-mentioned exclusions from ‘associate medical expenses’, the scope of coverage of your health plan would increase. The proportionate deduction would be on a lower amount allowing you to get a higher amount of claim.

All these changes would be effective from 1st October 2020 on new policies. For existing policies, the changes would be applicable at the time of renewal provided that the renewal date is on or after 1st April 2021. 

These changes would make health insurance plans more comprehensive and favourable for policyholders and also increase the penetration of health insurance in India. So, be prepared to get enhanced benefits from health insurance plans starting this October. Happy insuring!

Ever since Coronavirus changed its status from being an epidemic to becoming a pandemic, 21st century is split into three timelines – pre-COVID, COVID and post-COVID years. Currently, you are in the COVID timeline where the cases are increasing day by day. Though the initial lockdown checked the spread of the virus, ever since the Government has unlocked the country, the numbers are rising. Today, more and more people are facing the threat of infection which has, thus, put a spotlight on health insurance.

Max Bupa conducted a survey among individuals in eleven main cities of India to find out the need of the hour given the current crisis. Here’s what they found –

• 10% of the respondents wanted to invest in health insurance pre-COVID 
• 71% of the respondents feel a health insurance plan is a must for meeting COVID costs today
• 73% are willing to pay a higher premium for a policy which would cover COVID related hospitalisation
• 73% are more worried about health related expenses than other future goals
• 72% of the respondents are ready to buy a COVID health insurance policy immediately

(Source: Financial Express) 

These figures have made one thing certain – health insurance is the need of the hour in today’s COVID times when nobody knows when this pandemic would subside.

Do you know why health insurance has suddenly become a priority? Let’s find out –

• Increasing number of cases

  As on 7th August 2020, India’s COVID tally crossed the 20.30 lakh mark. (Source: Worldometers). Every day tens of thousands of new cases are adding to the total tally and there seems to be no respite. As the cases are increasing, individuals are finding themselves more and more prone to contracting the virus. As the chances of infection are becoming more probable by the passing minute, individuals want to insure themselves under a health plan so that in case they get infected, the plan would cover the cost of hospitalisation and quality medical care.

• Preference for private hospitalisation

  Even though the Government is treating COVID patients free or at negligible costs at Government hospitals, people prefer private hospitalisation. Basic amenities and the quality of care is perceived to be better in private hospitals and so the preference. However, private hospitals are costly. Hospitalisation for even a mild case of Coronavirus might result in INR 30,000 to INR 50,000 on a daily basis and given the need of a prolonged stay, the costs become unaffordable. A health plan, is therefore, needed to enable individuals the facility of private hospitalisation.

• Loss of job and/or reduction in income levels

  Following the nationwide lockdown, migration of workers, reduced demand and uncertainty, the economy has slowed down considerably. Many small and big businesses have handed the pink slips and/or imposed a salary cut. In these difficult times, individuals want to protect their savings against the possible financial threat of COVID infection. As such, they are willing to invest in health plans for financial security.

These reasons, therefore, have made health insurance the number one priority among consumers besides masks and sanitizers. Two new COVID specific plans have also been launched, Corona Kavach and Corona Rakshak, which are solely to cover the medical expenses of COVID infection.

So, if you have not yet insured yourself under a health plan, don’t delay. If you have a health plan, review the sufficiency of the coverage. An optimal sum insured is a must and so you should enhance your coverage if needed. The end to this pandemic is not in sight as yet but you can definitely build immunity for your finances through a health insurance plan. So, invest in health insurance to face the expenses which the infection would result in if it does strike and be prepared.