Source: Mint
You can use your health insurance policy only up to the
sum insured limit in a policy year. Once the cover is exhausted, you can’t make
any further claims. However, on renewal the next year, the entire sum insured
is available to you again.
Insurers are now launching products that recharge the sum
insured if you happen to exhaust it within the policy year.
How recharge plans work
Recharge or restore health insurance plans are regular
health insurance policies that pay for your hospitalization including pre- and
post-hospitalization days. An added feature is that once you exhaust the
original sum insured limit, the plan restores the same sum insured for future
hospitalization the same year. For example, suppose a policyholder buys a
health insurance policy with the restore option with Rs.3 lakh of sum insured
and a policy term of a year. She gets hospitalized and needs to pay a bill of Rs.3
lakh. The policy will help her do so and, at the same time, recharge the policy
with another Rs.3 lakh. If there is a subsequent hospitalization the same year,
the policyholder gets a cushion of Rs.3 lakh. Next year, when your policy is up
for renewal, the recharged amount will go away and your policy will start with
the original sum insured of Rs.3 lakh.
Beware of
This extra recharge comes with some important fine print.
To start with, plans will not extend this recharge limit for the same illness
or injury for which the policyholder made a claim earlier. In the example
above, say, the policyholder made a claim on account of a heart problem and
exhausted the cover. If the heart condition triggers subsequent
hospitalization, the recharged policy will not come in handy.
Also, in some plans the restore option will kick in only
when the entire sum insured limit is exhausted. So, if the sum insured in an
individual policy is Rs.3 lakh, and the hospitalization bill is Rs.2 lakh in
the first incident and Rs.3 lakh in the second, you will have to pay Rs.2 lakh
from your pocket for the second incident of hospitalization. But for any
subsequent hospitalization, the policy will come to the rescue. Then there are
plans that would pick up the tab for the second instance of hospitalization and
you will not have to shell out the Rs.2 lakh from your pocket. Go through the
fine print carefully.
What should you do?
The concept works well, but given the caveat, you need to
make sure that even under the restore option, you have a decent level of cover.
Recharge plans work well in case you have a floater policy. A floater policy
covers the entire family as one unit so if the cover is used by one member, the
insurance cover gets reduced by that much amount for the remaining members in a
policy year. But under the restore option, the sum insured would get
replenished and other members of the family will be able to use the cover.
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