Two significant concepts in health insurance plans that are often causes of confusion among policy-seekers are the Restore benefit and the Recharge benefit. Here, we have made an attempt to clear out all the confusion by first explaining the concepts individually and then drawing out the differences between the two.
Restore Benefit: While a health insurance policy is active, if the basic Sum Insured amount and the accumulated bonuses (if any) are completely exhausted during the course of a treatment, the Restore benefit will refill the amount up to the basic Sum Insured for that policy period.
- The restored Sum Insured can be used for the treatments other than the one for which the claim was already disbursed by the insurer.
- The Restore benefit can be availed only once in a policy year.
- The restored amount can be used only during the policy period it was bought in. It cannot be carried forward to the subsequent policy period.
To better understand the Restore benefit, let’s see an example.
The basic Sum Insured of Mr. Jain’s health insurance plan is ₹2,00,000. Mr. Jain gets hospitalized for Malaria and undergoes a treatment for the same, which completely exhausts the Sum Insured amount (that is, ₹2,00,000). Now, if Mr. Jain has the Restore Benefit feature active on his policy, his insurer will refill the basic Sum Insured amount (₹2,00,000) for that policy period. This Sum Insured amount can be utilized by Mr. Jain for any treatment except Malaria, as he has already made a claim for it. Also, after Mr. Jain exhausts the restored amount of ₹2,00,000, he will not be eligible for any further restoration for that policy year.
Let’s take another scenario. Mr. Jain was hospitalized for viral flu and exhausted ₹1,50,000 against the Sum Insured amount of ₹2,00,000. Now, during the next hospitalization, if the expenses amount to ₹1,00,000, the insurer will provide protection for ₹50,000 while the remaining ₹50,000 will have to be borne by Mr. Jain. Reason being, Mr. Jain has to exhaust the entire Sum Insured amount to be entitled to the Restore benefit.
Recharge Benefit: To stand out in the market, Religare Health Insurance Company started the Recharge feature, which was later on adopted by several other health insurers.
The Recharge benefit automatically reinstates up to 100% of the Sum Insured amount when the Sum Insured amount gets reduced owing to an earlier claim that has been disbursed. This facility is available immediately in the event of the next hospitalization in case the remainder of the basic Sum Insured falls short of the treatment cost. This is done regardless of whether or not the basic Sum Insured amount has got exhausted.
Note: An unlimited Recharge facility is available up to 100% basic Sum Insured amount for a policy year.
To better understand the concept of the Recharge benefit, let’s see an example. Mr. Jain was hospitalized for a particular ailment and exhausted ₹1,50,000 against the Sum Insured amount of ₹2,00,000. Now, in the same year, Mr. Jain was hospitalized again for another ailment and incurred ₹1,00,000 as hospitalization expenses. In this scenario, the insurer will automatically recharge the Sum Insured with ₹50,000 to reimburse the second hospitalization cost.
Clearly, the difference between both the features is that the Restore benefit reinstates the Sum Insured only when the entire Sum Insured amount gets completely exhausted.
On the other hand, the Recharge benefit reinstates the required amount automatically during the next hospitalization event (up to 100% of the basic Sum Insured amount) when the basic Sum Insured amount gets reduced. Here, reinstatement takes place regardless of whether or not the basic Sum Insured amount has got completely exhausted.
Now you know what add-on to look for while buying a health insurance policy!