Should you restore or go for higher sum insured in health insurance policy?

Restoration feature in a health insurance policy has caught the fancy of many primarily for offering double sum insured. Under this feature, the entire sum insured gets restored in a policy year when it gets exhausted due to hospitalisation. Suppose you have a family floater policy and one of the family members gets ill and uses the entire sum insured at the start of the policy year. Now,  if another family member falls ill then you will have to pay for all medical expenses from your own pocket. This is where the ‘restore’ feature can come to your rescue. If you have opted for the feature, the insurer will reinstate the sum insured acting as a backup plan. However, one should be aware of some of the preconditions which need to be fulfilled to trigger the restore benefit.

For instance, under some of the policies existing sum insured should be completely exhausted for restore benefit to trigger off. Let’s say if a person gets hospitalised and exhausts Rs 9 lakh on his Rs 10 lakh sum insured policy. Then the policy will not be restored in this case and any claim above Rs1 lakh will not be paid on the policy.

Moreover, the restoration benefit cannot be utilised for any disease for which the initial claim was made. Amit Chhabra, Head-Health Insurance, Policybazaar.com says, “Buying a restoration plan along with your base health policy significantly enhances your health insurance cover.  However, restoration benefit is available only for different illnesses and not for the same illness or injury in a policy term. Restoration benefits exist only for future claims, it is never applicable on the first claim made in a policy year. COVID cases are rising again and it can hit anybody at any time and it is important to have an adequate sum insured in place. We have seen COVID claims go up to 15 Lakh- 20 Lakh. In case of customers having lower sum insured policies, one should port their policy to the high sum insured. We are also seeing an uptick of 150% in porting from lower sum insured policies to the higher sum insured policies.”

Should one go for restore or higher sum insured?

It is always advisable to buy sufficient health cover based on the city and the stage of life you are in. Since the restore benefits have some conditions attached it may not be a good idea to depend solely on restore benefit for the complete protection of your family. Moreover, always compare how much extra would it cost you to get a higher cover. This is because high sum insured policies are not necessarily costly. The premium for Rs 1 crore health cover policies may cost you Rs 500-1000 more than the Rs 10 lakh sum insured plans but it will give you higher coverage compared to Rs 10 lakh plan. Some of these Rs 1 crore policies are designed as a combination of a base plan coupled with a super top-up, which substantially brings down the premium for such policies. Under a top-up plan, the coverage starts after the exhaustion of the deductible. Deductible means a particular limit of hospitalisation cost after which the policy gets triggered.