Opt for family floater with restoration benefits

It doubles cover at no extra cost in case existing sum insured is exhausted, and is also cheaper

Until recently, buying individual health insurance policies worked out to be a better option for couples instead of a family floater plan. By paying 30-35 per cent more, they could double the sum insured by going for two individual plans. But this has changed in the past few months since most private insurers introduced a “restoration” option in family floater policies.

The restoration option doubles the cover if the policyholder exhausts the sum insured. Say, you have health insurance of Rs 10 lakh. You run up a bill of Rs 8 lakh due to accidental injuries, and the policy reimburses it. After a few months, there's another claim of Rs 5 lakh. The insurer would pay only Rs 2 lakh if you owned a regular policy. The remaining Rs 3 lakh would have to be paid out of your pocket. However, in a policy with restoration benefit, you will get the full claim amount of Rs 5 lakh.

Moreover, there are no extra charges or loading on next year's premium for using the benefit. Policies with the restoration benefit offer a double safety blanket and also provide protection against high health care costs.

“The restoration option makes a lot of sense in a family floater plan. We have seen that many times one member uses the entire cover and then others in the family cannot use the insurance for the remaining policy period,” said Antony Jacob, CEO, Apollo Munich Health Insurance Company.

It is also more cost effective if you look at the premiums. For a Rs 10-lakh policy, the premium for Apollo Munich’s Optima Restore comes to Rs 15,040 for a husband aged 35 and wife aged 29 years. If they were to buy individual policies of Rs 10 lakh each, it would cost Rs 21,486. In fact, it’s even cheaper than buying individual cover of Rs 5 lakh each, which in this case would be Rs 16,434.

Some insurers have now started launching unlimited restoration. An individual can opt for Religare Health Insurance Care with such an option.

The restoration option, however, comes with a condition. "Many insurers don't reinstate the sum insured if there is a second claim on same or related illness. Very few companies do, but they too have a limit. Although a very good feature but customers must understand this detail before purchasing a policy,” says Vaidyanathan Ramani - joint head, health insurance business unit, Policybazaar.com.

Experts also say that while restoration of sum insured works like a top-up cover, it still makes sense to buy a top-up if you need a bigger cover. “If you are looking to enhance the existing health insurance, a top-up is a better option,” said M Ravichandran, president–insurance, Tata AIG General Insurance. 
 

A top-up plan helps individuals to address their need to mitigate rising medical expenses at affordable rates. It is useful for those with a group cover or low sum insured policies, or those who can afford to spend the first few lakhs out of their own pockets. A family floater with restoration is beneficial for families that want to maintain a particular premium payout, but enjoy continuous coverage in case of medical exigencies.