Why should you buy a health insurance with reset benefit?

As health care costs are rising at an unprecedented rate, a single medical crisis is enough to make you realise that your health cover is not sufficient. Moreover, when you cross the mark of 40, you may start experiencing medical conditions that eluded your younger self. That’s when your insurance coverage may look meager, especially if you had bought the policy a few years ago, and haven’t expanded your coverage since.

As most health insurance companies are aware of this fact, they have come up with a reset or refill benefit.

As per this feature, the basic cover gets automatically reinstated if you exhaust the entire sum insured during the policy tenure. For instance, you have a health insurance policy that offers Rs 10 lakhs coverage. During the policy tenure, you fall ill, and there is a claim of Rs 10 lakhs, which the insurer settles. In a few months, another claim of Rs 5 lakhs arises. In a regular mediclaim policy, you would be required to pay the entire amount from your pocket. However, if your policy comes with a restore feature, the insurer will reset your sum insured after the first claim. Which essentially means that your insurer will cover the second claim as well.

Here is an illustrative example:

Reset Benefit Example
Sum InsuredCasesScenario 1Scenario 2
Sum InsuredRs 8,00,000Rs 8,00,000
1st ClaimReasonAccidentMalaria
First Claim AmountRs 5,00,000Rs 3,00,000
Remaining Sum InsuredRs 3,00,000Rs 5,00,000
2nd ClaimReasonHeart AttackCancer
Second Claim AmountRs 5,00,000Rs 4,00,000
Will the reset feature trigger?Yes, sum insured will reset to Rs 8 lakhs as the available sum insured is not enough to settle the claim which is for an unrelated ailmentNo, since the available sum insured is sufficient to pay the claim
Remaining Sum InsuredRs 6,00,000 (8,0,000+3,00,000-5,00,000)Rs 1,00,000 (5,00,000-4,00,000)

Not all reset features are same

There are various types of restoration benefits which are offered by health insurers:

  • Complete exhaustion of sum insured: In various health insurance plans available in the market, the insurer restores the sum insured only when it is completely exhausted. In other words, the restoration feature will activate only when the policy coverage comes down to zero.
  • Partial exhaustion of sum insured: It works in favour of policyholders as the restoration will get triggered even when there is a partial exhaustion of sum insured.

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