Restoration clause: back-up that may not always kick in

The benefit is available once a year, but not for the same illness or person in a health policy

- Aprajita Sharma

Most health insurance plans offer a base cover of 5-10 lakh. But what happens if you or a family member need hospitalization more than once in a year? And what if multiple family members are hospitalized under a floater policy—will all of 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 hospitalized 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 hospitalizations 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 it's 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.