I’m a 38-year-old salaried professional and have a family floater health plan with coverage of Rs 5 lakh. Earlier this year, I had to undergo a sudden heart surgery that cost me Rs 5 lakh. The cost of treatment and hospitalization exhausted my entire amount from the insurance plan. Within the same policy term, my wife was also diagnosed with a gallbladder stone, the treatment and hospitalization cost for which came to around Rs 1.5 lakh. Since I wasn’t prepared for another hospitalization, I had to shell out the entire amount for my wife’s treatment out of my own pocket. With the increasing medical inflation and rise in health emergencies, how can I be better prepared in case I need to make multiple claims in the same policy term?
-Dheeraj Chawla from Noida
Response by Sarbvir Singh, CEO of Policybazaar.com
Thank you for your query. Considering the rise in critical illnesses among all age groups, this is not just your concern, but a fairly common problem among policyholders today. The increasing medical inflation has necessitated the need for an adequate sum insured in your health policy to battle multiple unexpected medical expenses within the same policy term. Fortunately, now the policies are being designed in a way that helps policyholders maximize their safety net in the face of health adversities. One such feature of health insurance is the restoration benefit. This feature has especially been conceptualized for a situation like yours where the sum insured might get exhausted in a single hospitalization claim.
During these times, opting for the restoration benefit in your plan comes to your rescue as this financially-sound decision can help you get through multiple claims in a single year. Simply put, restoration benefit reinstates your original sum insured in case it gets exhausted. This is the easiest way to boost your protection cover without having to worry about using up your sum insured. Given that you have a family floater plan, this benefit works best for such plans where the same policy is shared by more than one policyholder, so the chance of raising multiple claims within a policy year is also higher.
There are two kinds of restoration benefits – partial and complete exhaustion. As the name suggests, the former restores your sum insured if you completely exhaust your limit, while the latter restores the amount even if you use up a part of your sum insured. Earlier, the policyholders could have only opted for one-time restoration which meant the sum insured would be restored only once within the policy term. To effectively cater to different kinds of consumer needs, the benefit has evolved over time to take care of multiple hospitalization claims.
You can now opt for plans that offer unlimited restoration to all the covered members for hospitalization related to either the same illness or a different illness within the same policy year. For instance, if a couple has a policy of Rs 5 lakh sum insured and the husband makes the claim of Rs 5 lakh for heart surgery, the wife can still make another claim for up to Rs 5 lakh in the same policy year. Should the husband need to hospitalize again in the same policy year for the same heart ailment and claim up to Rs 5 lakh, he can do so.
However, you need to know that the benefit will come at an extra premium cost and the maximum amount of a single claim is usually up to the sum insured. Also, the restoration benefit is not carried forward even if it remains unused within the policy term. You also need to understand the exclusions in your plan or exceptions where the benefit might not get triggered. Most importantly, don’t forget to opt for a high sum insured in your policy. Restoration benefit should not be seen as a replacement for a high sum insured. If your sum insured is insufficient, this might not even cover your single first hospitalization claim, so the restoration benefit will still stand ineffective.
(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts)
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