Restoration and recharge benefits in health insurance policy

Health insurance policies come with restoration and recharge benefits, but not many policyholders know what these benefits entail or can tell the difference between the two.  So, let us try to find out various kinds of restoration options, how recharge benefits the insured and the difference between restoration and recharge benefits.

In the restore option, the insurance company restores the original sum insured (SI) of the policyholder after it gets fully exhausted for the treatment of the illnesses specified in the policy document. So, if a policyholder has taken a health insurance policy of Rs 5 lakh with restoration benefit and within three months of taking the policy, he suffers a cardiac arrest and has to undergo bypass surgery. The operation and medical treatment exhaust the entire policy sum insured of Rs 5 lakh. A few months later, he is diagnosed with cancer and has to undergo surgery and medical treatment and the cost comes to around Rs 3 lakh. The insurance company would also cover the cost of cancer surgery, hospitalisation and medical treatment as it would have restored the original sum assured of Rs 5 lakh after the treatment of bypass surgery exhausted the sum insured. In short, the SI has got doubled to Rs 10 lakh under the restoration benefit during the policy year. In this case, the restoration benefit gets triggered only after full exhaustion of the SI.

In the second restoration option, the SI is restored in full even if the original sum insured is partially exhausted. Hence, in the above example, even if the policyholder had exhausted only Rs 2 lakh out of the total SI of Rs 5 lakh, the restoration clause would be triggered.

In the case of restoration benefit, the benefit could be utilised for the treatment of the same disease and can be availed only during the policy year and cannot be carried forward to the next policy year.

The recharge benefit is different from restoration benefit in a health insurance policy, where the insurance company automatically reinstates up to 100% of the SI amount when the SI gets reduced on account of payment made for the previous claim made by the insured. This benefit is available immediately during the next hospitalisation where the balance of the basic SI fails to meet the cost of the treatment.