Health insurance plans come in several variants. One such variant is the Restore and Recharge of sum insured. Both the terms may mean the same, but it varies regarding its actual benefits. Both restore and recharge feature reinstates the sum insured amount of the policy, but, under different conditions.
The sum insured amount is nothing but the policy's limit of how many claims you can make in a year. For example, if you have a sum insured amount of Rs.2 Lakhs and have raised hospitalization claims for the full amount that year, then your cover is exhausted for the year. Only upon renewal the next year, the sum insured amount will be available again. However, with recharge and restore benefits, you can reinstate the sum insured amount the same year.
Recharge of Sum Insured
Recharge refers to the reinstatement of the sum insured amount. When the sum insured is utilized while making a claim, it instantly gets refilled to the original sum insured amount and can be used for the current policy year for a different illness claim.
- For example, you hold an insurance policy with a recharge option with a sum insured amount of Rs.2 Lakhs and a policy term of one year.
- You get hospitalized and make a claim of Rs.2 Lakhs, and the insurance company would help you make your payment
- The insurance company will also refill your sum insured back to the original Rs.2 Lakhs the same year.
- If there is a subsequent hospitalization with a different ailment the same year, then you are entitled to a cushion of Rs.2 Lakhs and don't have to pay anything out of your pocket
- Next year upon renewal, the recharge amount will lapse, and your policy will automatically start with the original sum insured
Restore of Sum Insured
Restore again refers to the reinstatement of the sum insured amount within the same policy year, but the amount will be restored only after the full sum insured amount and no claim bonus of the policy are exhausted.
For example, you hold an health insurance policy with a restore option with a sum insured of Rs.3 Lakhs
You get hospitalized and make a claim of Rs. 2 Lakhs, and the insurance company makes the payment of the same
You still hold a sum insured of Rs. 1 Lakh, which can be used for another claim and not eligible for a reinstatement of the sum insured amount yet.
Restore vs. Recharge – Which is Better?
Both the features work well only when the claims made within the year are for distinct medical conditions. Recharge option is relatively better because your sum insured amount gets refilled instantly after you make a single claim, and you don't have to wait until you exhaust your sum insured amount in full.
Also, Recharge feature works the best with family floater plans. They cover the entire family. Even if one family member is hospitalized and utilizes the sum insured amount, the remaining members can use the insurance for a different claim. The sum insured amount is replenished with the recharge option, and other family members can actually use the same.