After enduring a long and eventful period of COVID-19, it is natural to wonder about the adequacy of your health insurance coverage. Can the plan cover prolonged hospitalization or will it be insufficient if more family members need it? Many policyholders question their choice of plan, given the current economic situation. Incorporate the surge in medical inflation and the possibility of depleting your insured capital in a single hospitalization does not seem so far-fetched after all. This is where the restoration benefit of health insurance comes to your rescue. It’s the easiest way to add an extra layer of protection for yourself and your loved ones against an expected medical crisis – or maybe more.
The restoration benefit in health insurance is a feature that restores the total sum insured in the event that it is exhausted at any time during the insurance period. This feature has found many takers among people who go for family floating plans. This works especially for these plans, as the sum insured is shared by the whole family and the benefit covers the hospital costs of more than one family member.
The catering benefit option is a feature built into almost all other comprehensive health insurance plans. Here’s everything you need to know about it, and how to get the most out of it.
How the catering service works
Simply put, the restoration service restores the original insured amount if the policyholder uses it at any time during the insurance period. For example, you have a family floating plan of Rs 5 lakh and need to undergo sudden surgery which is depleting Rs 4 lakh. Now, if any of the other family members need hospitalization which costs another Rs 2 lakh, the balance of Rs 1 lakh will need to be paid out of your pocket. However, if you have the restoration benefit feature in your policy, the initial amount of Rs 5 lakh would be replenished as soon as the sum insured is fully exhausted.
Types of catering services
There are two types of restoration benefits –
# Complete exhaustion – Here, catering services are only taken into account when the entire sum insured has been used up. If the total amount is not used up, the benefit will not be triggered and the policyholder will have to pay the balance out of his pocket. Suppose you have Rs 5 lakh coverage and your heart surgery uses Rs 4 lakh. From now on, if you need Rs 2 lakh more for an unrelated claim during the same year, the restoration service will not be triggered because your original sum insured is not completely exhausted.
# Partial exhaustion – Under this, the benefits can be used even if a certain amount of the sum insured is used. Some insurers offer to cover a second amount of loss even if there is a certain amount of your sum insured. Take the above case here, and the catering service will be triggered in the event of partial exhaustion. Thus, your second claim will also be covered even if you have 1 lakh of Rs left on your original sum insured.
Check with your insurer on the terms of these two types and choose the one that best meets your needs. In addition, your family history is an important deciding factor before choosing the catering service.
What to check before choosing
Here is your checklist before opting for the restoration benefit in your health plan:
# The restoration benefit function makes the bonus more expensive. Be sure to ask how this will affect your premium.
# The most important rule to remember is that the restoration service is only triggered for unrelated medical claims. Suppose you exhaust your face amount for heart surgery, the restoration benefit will generally not cover a second heart related loss in the same year. Understand with your insurer the type of loss it will cover as well as the amount of the restoration service that will be covered. For example, Aditya Birla Capital offers restoration coverage of 150% of the sum insured for unrelated illness for coverage of Rs 5 lakh. However, Max Bupa Health Insurance offers unlimited restoration of the sum insured for related and unrelated illnesses for the same coverage of Rs 5 lakh.
# Ask your insurer about the relevant conditions that apply for the same or different illnesses for different family members.
# The restoration insured sum cannot generally be carried over to the following year even if you do not use it until it is valid.
# Check whether the service will be triggered if the sum insured is exhausted in a single claim or whether it also works in the event of multiple claims.
# Finally, don’t rely solely on the benefits of restoration for your protection. Instead, always opt for a higher sum insured to make sure your plan can handle medical emergencies.
(By Amit Chhabra, Health Insurance Manager, Policybazaar.com)