Restore the sum assured

Use the health restoration option for family floaters but it will work only if second claim is for a different ailment

Policyholders, especially ones with family floaters, always worry that one serious illness to a single family member would exhaust their entire sum assured. Worse still, the premium of the next policy would increase substantially because of the earlier claim.

In addition, with many companies going for the co-payment mode for family members of the employee, there are few options to have a substantial sum assured or buy additional insurance at cheap rates.

Health insurance companies have started tackling this problem through the health restore option. While it is offered for other health insurance policies, insurance brokers like Anuj Bhagia, chief marketing officer, Policybazaar.com, say it is only useful in the case of family floaters.

Much like a mobile phone recharge, these products restore the sum assured when it is exhausted. The best part: The entire amount will be restored automatically, without any additional paperwork and cost for that year.

Sounds too good to be true? Well, it almost is. The exclusions list is quite long as well. For one, the entire sum assured has to be exhausted for restoration. Then, if there is another claim arising due to the same illness, the policy will not pay for it. In other words, if someone in the family has a heart attack during the year, then another attack will not be covered for the same person.

Divya Gandhi, head-general insurance and principal officer at Emkay Insurance Brokers says while a policy with a restore option is definitely useful, it does not really offer double the sum assured for the same premium, as it is made out to be.

The policy is not very expensive. The premium for a policy with a restore option is five to 10 per cent more than one without it. For instance, in the case of Apollo Munich Optima Restore, the premium for a 30-year old couple for a sum insured of Rs 5 lakh is Rs 8,637 - about five per cent more than a similar policy without the benefit for the same couple.

Antony Jacob, chief executive officer, Apollo Munich Health Insurance, says, "Holders of family floaters, as well as individual policyholders, sometimes are in trouble when their sum insured is exhausted due to unforeseen medical requirements. This causes the entire family or the individual to be vulnerable to heavy out-of-pocket expenses, should the need for healthcare arise in the policy year. Hence, a restore policy, that provides restoration of the full sum insured amount, is useful."

Not all companies offer products with the restore option. Other than Apollo Munich, companies offering such policies are Star Health Insurance Company, L&T General Insurance and Religare Health Insurance. Max Bupa's policy is slightly different, in which there is a fixed limit for every member. Over and above, there is a floater amount that is restored when individual limits are exhausted.

Of course, for employees with good insurance cover from companies, buying an additional top-up policy might still work out cheaper. But with health costs shooting up every year, the restoration clause is a good measure for families with senior citizens.