How restoration works in health insurance
Most health insurance plans offer a base cover of ₹5-10 lakh. But what happens if you or a family member need hospitalisation more than once in a year? And what if multiple family members are hospitalised under a floater policy—will all of them them be covered?
The answer lies in a crucial but often overlooked feature called the restoration benefit, aka recharge or reinstatement. This feature reinstates your sum insured once it is used up.
Neeraj Khushalani, founder of InsureSmart, said one of his clients—a couple with a ₹10 lakh family floater—faced a crisis when both were hospitalised following an accident. The wife suffered a cardiac arrest and a leg fracture; the husband injured his shoulder. Their medical bills soared past ₹15 lakh.
“Thanks to the restoration benefit, we were able to cover both hospitalisations under the base policy,” said Khushalani. “In fact, the wife’s claim alone triggered their super top-up. The husband’s ₹3.5 lakh claim was fully paid from the restored base cover.”
Read the fine print
Not everyone is this lucky. For some, this feature turns out to be practically inaccessible when its needed the most. Take the case of Mumbai resident Dr. Praful Shah. “I was advised chemotherapy every 21 days. My health insurance policy had a restore benefit, which I assumed would give me additional coverage once the base sum insured was exhausted,” he said.
But there was a catch. “I later discovered that the restore benefit would only be triggered if there was a 45-day gap between two claims. Since my chemo sessions followed a 21-day cycle, as per standard medical protocol, the restore benefit never kicked in. Despite my genuine and ongoing need for coverage, a key feature of my policy became unusable when I needed it the most.”
Insurance consultant Mitesh Dave’s client benefited immensely from a well-designed restoration clause. Diagnosed with cancer, the client underwent surgery for ₹4.29 lakh, which was covered under his ₹10 lakh base health insurance policy. After being discharged, he began frequent chemotherapy sessions. Fortunately, the policy didn’t mandate any cool-off period between claims, so all sessions were covered without delay.
Later he was admitted for a stem cell transplant but bis condition deteriorated rapidly. He was put on a ventilator but sadly passed away. His entire hospitalisation and treatment spanned just 23 days. “Even though the base cover was only ₹10 lakh, the restoration benefit allowed us to claim close to ₹17 lakh,” said Dave. “The patient couldn’t be saved, but his family didn’t have to bear the financial burden.”
Types of restoration
Case studies show that restoration benefits vary widely across health plans. The most basic version allows one restoration in a year — but only for different illnesses and different people. Some insurers offer similar plans that cover the same person and the same illness.
A key difference is when restoration is triggered. In auto-restoration, the benefit kicks in only after the full sum insured is used up. For example, with ₹10 lakh base cover, if you claim ₹8 lakh first and ₹5 lakh later, the second claim will only get ₹2 lakh (what’s left). Restoration will kick in only after that – when the third claim comes in. For plans with partial exhaustion benefit in restoration, this kicks in even after a part of the sum assured is used (so that ₹5 lakh second claim would have been paid in full).
Here’s how to check restoration clauses, according to Ditto Insurance: Is it one-time or unlimited in a year? Some allow only 2-3 times. Is it valid for the same or different illnesses and people? Is it triggered after full or partial use of the sum assured? Can it be used in the same hospitalisation or only in the next one? (same-claim restoration is better).
Also look for the cool-off period. Some policies require a 45-day gap between claims to restore the sum insured — which is a problem with treatments such as chemotherapy or dialysis, which require frequent sessions.
Unlimited restoration versus super top-up
Khushalani said some distributors wrongly pitch the restoration benefit as a substitute for super top-up to sell higher base covers. But relying solely on restoration for extra coverage is risky. “Given the limitations in most policies, a super top-up helps bridge the gap,” he said.
He shared the example of a man with a ₹10 lakh base cover and ₹50 lakh super top-up (with ₹10 lakh deductible) who needed angioplasty and heart surgery that would cost ₹14 lakh. The first claim was covered through the base cover and super top-up. But just 10 days later he was hospitalised again. Since the restoration had a cool-off clause, it didn’t activate. Thankfully, the super top-up paid for the second hospitalisation. Without it, the man would’ve had to pay out of pocket.
Restoration is helpful, but only if it’s unconditional. Always read policy terms carefully, and don’t fall for the myth of “unlimited coverage” without understanding the fine print.
